Acctng I Ch 8 Review

The last step in the accounting cycle is to

• record transactions in a journal.

• prepare a work sheet.

• journalize and post closing entries.

• prepare a post-closing trial balance.

Income Summary is a(n)

• asset account

• liability account

• owner's equity account

• expense account

Temporary accounts include assets, expenses, and the owner's drawing account.

• True

• False

The series of accounting activities in recording financial information for a fiscal period is called an accounting cycle.

• True

• False

At the end of a fiscal period, the balances of permanent accounts are transferred to the owner's capital account.

• True

• False

Accounts used to accumulate information from one fiscal period to the next are

• revenue accounts.

• permanent accounts.

• temporary accounts.

• expense accounts.

After closing entries are posted, the balance in the owner's drawing account should be

• a debit.

• zero.

• a credit.

• negative.

Temporary accounts begin each new fiscal period with a

• debit balance

• credit balance

• zero balance

• balance equal to the net income

Temporary accounts are also called nominal accounts

• True

• False

The balances of the liability accounts must be reduced to zero to prepare the accounts for the next period.

• True

• False