2ND PEER

TUTORIAL
SESSION
ACC 111 – COMPLETING THE ACCOUNTING CYCLE PART 1
(CLOSING ENTRIES TO POST CLOSING TRIAL BALANCE)
Pre-Test
1. The final step in the accounting cycle is to prepare

a. closing entries.
b. financial statements.
c. a post-closing trial balance.
d. adjusting entries.
1. The final step in the accounting cycle is to prepare

a. closing entries.
b. financial statements.
c. a post-closing trial balance.
d. adjusting entries.
2. The post-closing trial balance contains

a. real accounts only

b. nominal accounts only
c. both real accounts and nominal accounts
d. neither real accounts nor nominal accounts
2. The post-closing trial balance contains

a. real accounts only

b. nominal accounts only
c. both real accounts and nominal accounts
d. neither real accounts nor nominal accounts
3. The purpose of the post-closing trial balance is to

a. prove that no mistakes were made.

b. prove the equality of the balance sheet account
balances that are carried forward into the next accounting
period.
c. prove the equality of the income statement account
balances that are carried forward into the next accounting
period.
d. list all the balance sheet accounts in alphabetical order
for easy reference.
3. The purpose of the post-closing trial balance is to

a. prove that no mistakes were made.

b. prove the equality of the balance sheet account
balances that are carried forward into the next accounting
period.
c. prove the equality of the income statement account
balances that are carried forward into the next accounting
period.
d. list all the balance sheet accounts in alphabetical order
for easy reference.
4. A post-closing trial balance will show

a. zero balances for all accounts.

b. zero balances for balance sheet accounts.
c. only permanent account balances.
d. only temporary balances
4. A post-closing trial balance will show

a. zero balances for all accounts.

b. zero balances for balance sheet accounts.
c. only permanent account balances.
d. only temporary balances
5. The closing entry process consists of closing

a. all asset and liability accounts.

b. out the owner's capital account.
c. all permanent accounts.
d. all temporary accounts
5. The closing entry process consists of closing

a. all asset and liability accounts.

b. out the owner's capital account.
c. all permanent accounts.
d. all temporary accounts
6. A double rule applied to accounts in the ledger during the
closing process implies that

a. The account is an income statement account.

b. The account is a balance sheet account.
c. the account balance is not zero.
d. a mistake has been made, since double ruling is
prescribed
6. A double rule applied to accounts in the ledger during the
closing process implies that

a. The account is an income statement account.

b. The account is a balance sheet account.
c. the account balance is not zero.
d. a mistake has been made, since double ruling is
prescribed
 7. The entry to close the
The income statement for the year 2008 of
Nova Co. contains the following information: revenue account includes a
Revenues $70,000
Expenses:
Wages Expense $45,000
a. debit to Income Summary for
Rent Expense
Advertising Expense
12,000
6,000
$3,500.
Supplies Expense
Utilities Expense
6,000
2,500
b. credit to Income Summary for
Insurance Expense
Total expenses
2,000
73,500
$3,500.
Net income (loss) $(3,500)
c. debit to Revenues for
$70,000.
d. credit to Revenues for
$70,000.
 7. The entry to close the
The income statement for the year 2008 of
Nova Co. contains the following information: revenue account includes a
Revenues $70,000
Expenses:
Wages Expense $45,000
a. debit to Income Summary for
Rent Expense
Advertising Expense
12,000
6,000
$3,500.
Supplies Expense
Utilities Expense
6,000
2,500
b. credit to Income Summary for
Insurance Expense
Total expenses
2,000
73,500
$3,500.
Net income (loss) $(3,500)
c. debit to Revenues for
$70,000.
Revenue $70,000
d. credit to Revenues for
Income Summary $70,000 $70,000.
 8. The entry to close the
The income statement for the year 2008 of
Nova Co. contains the following information: expense accounts includes a
Revenues $70,000
Expenses:
Wages Expense $45,000
a. debit to Income Summary for
Rent Expense
Advertising Expense
12,000
6,000
$3,500.
Supplies Expense
Utilities Expense
6,000
2,500
b. credit to Income Summary for
Insurance Expense
Total expenses
2,000
73,500
$3,500.
Net income (loss) $(3,500)
c. debit to Income Summary for
$73,500.
d. debit to Wages Expense for
$2,500.
 8. The entry to close the
The income statement for the year 2008 of
Nova Co. contains the following information: expense accounts includes a
Revenues $70,000
Expenses:
Wages Expense $45,000
a. debit to Income Summary for
Rent Expense
Advertising Expense
12,000
6,000
$3,500.
Supplies Expense
Utilities Expense
6,000
2,500
b. credit to Income Summary for
Insurance Expense
Total expenses
2,000
73,500
$3,500.
Net income (loss) $(3,500)
c. debit to Income Summary for
Income Summary $73,500 $73,500.
Wages Expense $45,000
Rent Expense 12,000
d. debit to Wages Expense for
Advertising Expense 6,000 $2,500.
Supplies Expense 6,000
Utilities Expense 2,500
Insurance Expense 2,000
 9. After the revenue and
The income statement for the year 2008 of
Nova Co. contains the following information: expense accounts have been
Revenues $70,000 closed, the balance in Income
Expenses:
Wages Expense $45,000 Summary will be
Rent Expense 12,000
Advertising Expense 6,000
Supplies Expense
Utilities Expense
6,000
2,500
a. $0.
Insurance Expense
Total expenses
2,000
73,500
b. a debit balance of $3,500.
Net income (loss) $(3,500) c. a credit balance of $3,500.
d. a credit balance of $70,000.
 9. After the revenue and
The income statement for the year 2008 of
Nova Co. contains the following information: expense accounts have been
Revenues $70,000 closed, the balance in Income
Expenses:
Wages Expense $45,000 Summary will be
Rent Expense 12,000
Advertising Expense 6,000
Supplies Expense
Utilities Expense
6,000
2,500
a. $0.
Insurance Expense
Total expenses
2,000
73,500
b. a debit balance of $3,500.
Net income (loss) $(3,500) c. a credit balance of $3,500.
d. a credit balance of $70,000.

Income Summary (73,500-70,000) $ 3,500

 10. At January 1, 2008, Nova
The income statement for the year 2008 of
Nova Co. contains the following information: reported owner’s equity of
Revenues $70,000 $50,000. Owner drawings for
Expenses:
Wages Expense $45,000 the year totalled $10,000. At
Rent Expense 12,000
Advertising Expense 6,000 December 31, 2008, the
Supplies Expense 6,000
Utilities Expense 2,500 company will report owner’s
Insurance Expense 2,000
Total expenses 73,500 equity of
Net income (loss) $(3,500)

a. $13,500.
b. $36,500.
c. $40,000.
d. $43,500.
 10. At January 1, 2008, Nova
The income statement for the year 2008 of
Nova Co. contains the following information: reported owner’s equity of
Revenues $70,000 $50,000. Owner drawings for
Expenses:
Wages Expense $45,000 the year totalled $10,000. At
Rent Expense 12,000
Advertising Expense 6,000 December 31, 2008, the
Supplies Expense 6,000
Utilities Expense 2,500 company will report owner’s
Insurance Expense 2,000
Total expenses 73,500 equity of
Net income (loss) $(3,500)

a. $13,500.
Nova, Capital beg. bal. $ 50,000 b. $36,500.
Net Loss (3,500)
Closing Drawing (10,000) c. $40,000.
Nova, Capital end $ 36,500 d. $43,500.
DISCUSSION
CLOSING ENTRIES
CLOSING ENTRIES
CLOSING ENTRIES
CLOSING ENTRIES
CLOSING ENTRIES
CLOSING ENTRIES
CLOSING ENTRIES
CLOSING ENTRIES
CLOSING ENTRIES
CLOSING ENTRIES
CLOSING ENTRIES
CLOSING ENTRIES
POST-CLOSING TRIAL BALANCE
POST-CLOSING
CLOSING ENTRIES
TRIAL BALANCE
POST-CLOSING
CLOSING ENTRIES
TRIAL BALANCE
POST-CLOSING
CLOSING ENTRIES
TRIAL BALANCE
Post-Test
1. After the adjusting entries are journalized and posted to the
accounts in the general ledger, the balance of each account
should agree with the balance shown on the

a. adjusted trial balance.

b. post-closing trial balance.
c. the general journal.
d. adjustments columns of the worksheet.
1. After the adjusting entries are journalized and posted to the
accounts in the general ledger, the balance of each account
should agree with the balance shown on the

a. adjusted trial balance.

b. post-closing trial balance.
c. the general journal.
d. adjustments columns of the worksheet.
2. Closing entries are necessary for

a. permanent accounts only.

b. temporary accounts only.
c. both permanent and temporary accounts.
d. permanent or real accounts only.
2. Closing entries are necessary for

a. permanent accounts only.

b. temporary accounts only.
c. both permanent and temporary accounts.
d. permanent or real accounts only.
3. The income summary account

a. is a permanent account.
b. appears on the balance sheet.
c. appears on the income statement.
d. is a temporary account.
3. The income summary account

a. is a permanent account.
b. appears on the balance sheet.
c. appears on the income statement.
d. is a temporary account.
4. Closing entries are journalized and posted

a. before the financial statements are prepared.

b. after the financial statements are prepared.
c. at management's discretion.
d. at the end of each interim accounting period.
4. Closing entries are journalized and posted

a. before the financial statements are prepared.

b. after the financial statements are prepared.
c. at management's discretion.
d. at the end of each interim accounting period.
5. The balances that appear on the post-closing trial balance
will match the

a. income statement account balances after adjustments.

b. balance sheet account balances after closing entries.
c. income statement account balances after closing
entries.
d. balance sheet account balances after adjustments
5. The balances that appear on the post-closing trial balance
will match the

a. income statement account balances after adjustments.

b. balance sheet account balances after closing entries.
c. income statement account balances after closing
entries.
d. balance sheet account balances after adjustments
6. Speedy Bike Company received a $940 check from a
customer for the balance due. The transaction was erroneously
recorded as a debit to Cash $490 and a credit to Service
Revenue $490. The correct entry should be
a. debit Cash, $940; credit Accounts Receivable, $940.
b. debit Cash, $450 and Accounts Receivable, $490; credit
Service Revenue, $940.
c. debit Cash, $450 and Service Revenue, $490; credit
Accounts Receivable, $940.
d. debit Accounts Receivable, $940; credit Cash, $450 and
Service Revenue, $490.
6. Speedy Bike Company received a $940 check from a
customer for the balance due. The transaction was erroneously
recorded as a debit to Cash $490 and a credit to Service
Revenue $490. The correct entry should be
a. debit Cash, $940; credit Accounts Receivable, $940.
b. debit Cash, $450 and Accounts Receivable, $490; credit
Service Revenue, $940.
c. debit Cash, $450 and Service Revenue, $490; credit
Accounts Receivable, $940.
d. debit Accounts Receivable, $940; credit Cash, $450 and
Service Revenue, $490.
 7. Use the following income statement for the year 2008 for J.
S. Caper Company to prepare entries to close the revenue and
expense accounts for the company.

Service revenues $100,000

Expenses:
Wages Expense $40,000
Rent Expense 12,500
Advertising Expense 5,700
Total expenses ( 58,200 )
Net income (loss) $ 41,800
 7. Use the following income statement for the year 2008 for J.
S. Caper Company to prepare entries to close the revenue and
expense accounts for the company.

Service revenues $100,000 Service Revenue........ 100,000

Expenses: Income Summary ................. 100,000
Wages Expense $40,000
Income Summary .......... 58,200
Rent Expense 12,500 Wages Expense ................................ 40,000
Advertising Expense 5,700 Rent Expense..................................... 12,500
Total expenses ( 58,200 ) Advertising Expense.......................... 5,700

Net income (loss) $ 41,800

8. T. Price Company earned net income of $43,000 during
2008. The company had owner drawings totalling $30,000
during the period. Prepare the entries to close the Income
Summary and the Price, Drawing account.
8. T. Price Company earned net income of $43,000 during
2008. The company had owner drawings totalling $30,000
during the period. Prepare the entries to close the Income
Summary and the Price, Drawing account.

Income Summary ................................... 43,000

Price, Capital ............................................. 43,000

Price, Capital .......................................... 30,000

Price, Drawing .......................................... 30,000
 9. The entry to close the
The income statement for the month of
June, 2008 of Delgado Enterprises contains revenue account includes a
the following information:

Revenues $7,000
Expenses: a. debit to Income Summary for
Wages Expense $2,000
Rent Expense 1,000 $3,400.
Advertising Expense 300
Supplies Expense 200 b. credit to Income Summary for
Insurance Expense 100
Total expenses (3,600) $3,400.
Net income (loss) $3,400
c. debit to Income Summary for
$7,000.
d. credit to Income Summary for
$7,000.
 9. The entry to close the
The income statement for the month of
June, 2008 of Delgado Enterprises contains revenue account includes a
the following information:

Revenues $7,000
Expenses: a. debit to Income Summary for
Wages Expense $2,000
Rent Expense 1,000 $3,400.
Advertising Expense 300
Supplies Expense 200 b. credit to Income Summary for
Insurance Expense 100
Total expenses (3,600) $3,400.
Net income (loss) $3,400
c. debit to Income Summary for
$7,000.
Revenue $ 7,000 d. credit to Income Summary for
Income Summary $7,000 $7,000.
 10. The entry to close the
The income statement for the month of
June, 2008 of Delgado Enterprises contains expense accounts includes a
the following information:

Revenues $7,000
Expenses: a. debit to Income Summary for
Wages Expense $2,000
Rent Expense 1,000 $3,400.
Advertising Expense 300
Supplies Expense 200 b. credit to Rent Expense for
Insurance Expense 100
Total expenses (3,600) $1,000
Net income (loss) $3,400
c. credit to Income Summary for
$3,600.
d. debit to Wages Expense for
$2,000.
 10. The entry to close the
The income statement for the month of
June, 2008 of Delgado Enterprises contains expense accounts includes a
the following information:

Revenues $7,000
Expenses: a. debit to Income Summary for
Wages Expense $2,000
Rent Expense 1,000 $3,400.
Advertising Expense 300
Supplies Expense 200 b. credit to Rent Expense for
Insurance Expense 100
Total expenses (3,600) $1,000
Net income (loss) $3,400
c. credit to Income Summary for
Income Summary $3,600 $3,600.
Wages Expense $2,000
d. debit to Wages Expense for
Rent Expense 1,000
Supplies Expense 300 $2,000.
Advertising Expense 200
Insurance Expense 100
EVALUATION
 PHOTO
OPPORTUNITY