Study set for chapter eight of our accounting book
Terms in this set (12)
Accounts used to accumulate information from one fiscal period to the next
Accounts used to accumulate information until it is transferred to the owner's capital account
Journal entries used to prepare temporary accounts for a new fiscal period
post-closing trial balance
A trial balance prepared after the closing entries are posted
The series of accounting activities included in recording financial information for a fiscal period
What do the ending balances or permanent accounts for one fiscal period represent at the beginning of the next fiscal period?
The pervious permanent accounts are the starting balances fro the fiscal period.
What do the balances of temporary accounts show?
The balances of temporary accounts are to show changes in the owner's capital for a single fiscal period.
List the four closing entries
1) An entry to close income statement accounts with credit balances
2) An entry to close income statement accounts with debit balances
3) An entry to record net income or net loss and close INCOME SUMMARY
4) An entry to close the owner's drawing account
Why are lines drawn in both the balance debit and balance credit columns when an account has a zero balance?
So you can easily notice that the account has a zero balance
Which accounts go on the post closing trial balance?
Only general ledger accounts with balances are included on a post-closing trial balance.
Why are temporary accounts omitted form a post closing trial balance?
Temporary accounts are omitted from the post closing trial balance because they have a balance of zero
What are the steps in the accounting cycle?
The Steps in the accounting cycle are analyze transactions, journalize, post, prepare work sheet, journalize and posy adjusting entries, prepare financial statements, journalized and post closing entries, prepare post closing trial balance.