fame8

Question 1

The account that is used solely to determine the net effect of revenues and expenses and to transfer the resulting income or loss into equity is

The balance must be reduced to zero with a debit.

The balance must be reduced to zero with a credit.

Expenses must be netted against the revenue accounts.

The income summary must be debited.

Salary expense.

Accounts payable.

Rent revenue.

Cost of goods sold.

Determine if debits equal credits after the closing entries have been made.

Detect recording and transcription errors after reversing entries are made.

Check for clerical mistakes before the closing entries are made.

Help prevent recording, posting, and other bookkeeping errors.

Correct mistakes from previous journal entries.

Account for transactions left out in the previous period.

Make the recording of regular transactions easier.

Change the financial statements from prior periods.

Balance sheet.

Statement of cash flows.

Income statement.

Statement of retained earnings.

Depreciation expense.

Accumulated depreciation.

Accounts payable.

Prepaid expense.

An adjusting entry for depreciation of a piece of equipment.

A cost of goods sold adjustment to inventory.

A closing entry that brought a revenue account to zero.

An adjusting entry for a prepaid item that was expensed in the original transaction.

The income statement can be prepared to report on an entity’s performance during a specified period.

The entity’s net income or loss is transferred to equity.

All income statement accounts will begin each accounting period at zero.

Regular transactions are not affected by accruals.