Right Answer WHAT IS THE PURPOSE OF CLOSING ENTRIES?A) TO BRING THE BALANCES OF ASSETS TO ZEROBALANCES OFB) TO UPDATEACCOUNTSTHELIABILITYc) TO TRANSFER THE BALANCES OF TEMPORARYACCOUNTS TO RETAINED EARNINGSD) TO REPORT CHANGES IN THE BALANCE SHEET

Explanation of Temporary Accounts:Temporary accounts, also known as nominal accounts, are used to…

Answered: WHAT IS THE PURPOSE OF CLOSING ENTRIES?…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter3: Review Of A Company's Accounting System

Section: Chapter Questions

Problem 24GI

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What is the purpose of closing entries ?
Which of the following accounts would not be included in the closing entries?a. Service Revenueb. Depreciation Expensec. Retained Earningsd. Accumulated Depreciation
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Match the statements below with the accounting assumption, characteristic, or principle to which the statement relates. Assumptions/characteristics/principles may be used once, more than once, or not at all. Recorded when the performance obligation is satisfied. a. Revenue recognition principle V The reason for recording accruals and deferrals in adjusting entries. b. Matching principle Valuing assets at amounts originally paid for them. C. Historical cost principle Entity assumed to have a long life d. Going concern assumption Description of significant accounting policies and unusual events. e. Full disclosure principle v Information has predictive and confirmatory value. T. Relevance characteristic 8. Consistency characteristic
A change from cash basis to accrual basis should be reported A. Retroactively as a correction of errorB. Retroactively as a change in accounting policyC. As component of income from continuing operationsD. As component of other comprehensive income
Discussion
A major purpose of preparing closing entries is toa. update the Retained Earnings account.b. adjust the asset accounts to theircorrect current balances
MCQ
Complete the statement: closing entries ________ A. Reflect the net income for the accounting period B. Are also posted in the subsidiary ledgers C. Involve all ledger accounts D. Are recorded in the special journals The process wherein transactions are recorded in the journal are transferred to the appropriate accounts in the general ledger and subsildiary ledgers, if appropriate, is called ___________ A. Ledgering B. Analyzing C. Posting D. Journalizing
The T-account is used to summarize which of thefollowing?a. Increases and decreases to a single account in theaccounting system.b. Debits and credits to a single account in the accountingsystem.c. Changes in specific account balances over a timeperiod.d. All of the above describe how T-accounts are used byaccountants.

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WHAT IS THE PURPOSE OF CLOSING ENTRIES? A) TO BRING THE BALANCES OF ASSETS TO ZERO BALANCES OF B) TO UPDATE ACCOUNTS THE LIABILITY c) TO TRANSFER THE BALANCES OF TEMPORARY ACCOUNTS TO RETAINED EARNINGS D) TO REPORT CHANGES IN THE BALANCE SHEET