Correct Answer: (a) Service Revenue. After closing entries have been journalized and posted, all revenue accounts such as Service…
What type of accounts are zeroed during the closing process?
Revenues, expenses, and dividends represent amounts for a period of time; one must “zero out” these accounts at the end of each period (as a result, revenue, expense, and dividend accounts are called temporary or nominal accounts).
What happens after adjusting and closing entries have been posted?
Closing entries transfer the balances of the permanent accounts to the temporary accounts. A post-closing trial balance is prepared to test the equality of the general ledger after all adjusting and closing entries have been posted. After closing entries have been posted, the temporary accounts will have zero balances.
What is the procedure for closing the book?
In this article, we’ll cover the following steps:
- Transfer Journal Entries to the General Ledger.
- Sum the General Ledger Accounts.
- Make a Preliminary Trial Balance.
- Enter Adjusting Journal Entries.
- Make an Adjusted Trial Balance.
- Generate Financial Statements.
- Enter Closing Entries.
- Generate a Final Trial Balance.
What makes an account have a zero balance?
An account that will have a zero balance after closing entries have been journalized and posted is: (a) Service Revenue. (b) Supplies. (c) Prepaid Insurance. (d) Accumulated Depreciation-Equipment.
When does retained earnings account have zero balance?
An error has occurred in the closing entry process if: a) the retained earnings account is credited for the amount of net income b) revenue and expense accounts have zero balances c) the balance sheet accounts have zero balances. d) the dividends account is closed to the retained earnings account c) the balance sheet accounts have zero balances.
What are the different types of accounts after closing?
Accounts are two different groups: Permanent – balance sheet accounts including assets, liabilities, and most equity accounts. These account balances roll over into the next period. Temporary – revenues, expenses, dividends (or withdrawals) account. These account balances do not roll over into the next period after closing.
What are the closing entries on the statement of retained earnings?
The closing entries are the journal entry form of the Statement of Retained Earnings. The goal is to make the posted balance of the retained earnings account match what we reported on the statement of retained earnings and start the next period with a zero balance for all temporary accounts.
