Instructions: Encircle the corresponding number if the statement is TRUE and mark X to the number which contains FALSE statement. 1. If the post-closing trial balance does not balance, then the error(s) definitely occurred at some point during the closing process. All nominal accounts must be closed before the Income Summary account 2. can be closed. 3. The post-closing trial balance will have fewer accounts than the adjusted trial balance. The balances of all the accounts that appear on a balance sheet are the same on the adjusted trial balance as they are on a post-closing trial balance. 4. 5. The post-closing trial balance will contain only real accounts. 6. The post-closing trial balance contains asset, liability, withdrawal and capital accounts. A reversing entry is a journal entry which is the exact opposite of a related adjusting entry made at the end of the period. Post-closing trial balance tests the equality of the accounts after the adjustments and the closing entries are posted. Supplies Expense is a temporary account. 7. 8. 9. 10. During the closing process, revenues are transferred to the credit side of the Income Summary account. 11. The income summary account is used to close the income and expense accounts. The balance of the owner's capital account represents the cumulative net result of income, expense and withdrawal transactions. 13. Closing entries clear income and expense accounts at the end of the 12. period. In the accounting cycle, information from source documents is initially recorded in the journal. 14. 15. Nominal account balances are reduced to zero by closing entries. 16. The only accounts that are closed are income statement accounts. Closing entries result in the transfer of profit or loss into the owner's Capital account. 17. 18. After all closing entries have been entered and posted, the balance of the Income Summary account will be zero. Depreciation Expense-Building is a temporary account. 20. Withdrawals is a temporary account. 19.