Closing Entries 1
Acronym to describe the closing entries
What is REID?
The definition of a Permanent account
What is an account that carries the balance over into the new fiscal period?
The accounts that appear on the Post-Closing Trial balance.
What are Assets, Liabilities, and the Capital account?
The balance in the Drawing account after closing entries have been posted.
What is zero?
The Accounting Standards that makes adjusting entries necessary
What is The Matching Principle and Revenue Recognition Principle
The account that is credited when closing Expenses.
What is Income Summary?
The accounts and/or types of accounts that must be closed
What are Revenues, Expenses, Income Summary & Drawing?
The purpose of a Post-Closing Trial Balance.
What is to be sure that the debits equal the credits of all permanent accounts?
The journal entry to close Income Summary when there is a net income.
What is debit Income Summary and credit the Capital account?
Journal entries used to prepare temporary accounts for a new fiscal period.
What are closing entries?
The journal entry to close out the Sales account that has an ending balance of $58,500
What is: Debit Sales for $58,500 and Credit Income Summary for $58,500
The heading of a Post-Closing Trial Balance.
What is Who? What? When?
Accounts used to accumulate information from one fiscal period to another.
What are temporary accounts?
The balance of all temporary accounts at the beginning of a new fiscal period.
What is zero?
The journal entry to close out the Income Summary account that has a Debit balance of $18,200
What is: Debit Capital for $18,200 and Credit Income Summary for $18,200
Where balances of permanent accounts are taken to be used for Post-Closing Trial Balance.
What is from the ledger accounts?
Name a type of permanent account.
What is an Asset, Liability or Capital account.
Assets, liabilities and the capital account.
What are permanent accounts?
The account that is closed out directly into Capital
What is Drawing?
The last step of the Accounting Cycle.
What is prepare a Post-Closing Trial Balance?
The closing entry to close the Drawing account.
What is debit the Capital account and credit Drawing?