Ch3. Video 12 - Closings:Post-Closing Trial Balance Example

The video tutorial covers the process of closing entries in accounting, including handling revenues, expenses, and dividends. It explains how to create an income summary account, close it, and prepare a post-closing trial balance. The tutorial emphasizes the importance of balancing debits and credits and provides a step-by-step guide to ensure accuracy in financial statements.

What is the purpose of creating an income summary table during the closing process?

• To prepare financial statements

• To calculate cash flow

• To summarize temporary accounts

• To track permanent accounts

Which account is credited when closing a revenue account?

• Retained Earnings

• Accounts Receivable

• Cash

• Income Summary

When closing an expense account, what is the correct entry?

• Debit Expense, Credit Income Summary

• Credit Expense, Debit Income Summary

• Credit Income Summary, Debit Expense

• Debit Income Summary, Credit Expense

What is the result of closing the income summary account?

• It adjusts the liabilities

• It updates the cash balance

• It affects the asset accounts

• It shows the net income or loss

Which account is affected when dividends are closed?

• Cash

• Accounts Payable

• Income Summary

• Retained Earnings

What is the purpose of the post-closing trial balance?

• To ensure all temporary accounts are closed

• To prepare the income statement

• To verify the balance sheet

• To calculate net income

Which accounts are included in the post-closing trial balance?

• Only asset accounts

• Only liability accounts

• All accounts with balances

• Only equity accounts