Income Statement
TRUE-FALSE STATEMENTS
8. Closing entries are not needed if the business plans to continue operating in the future and issue financial statements each year.
9. The dividends account is closed to the Income Summary account in order to properly determine net income (or loss) for the period.
10. After closing entries have been journalized and posted, all temporary accounts in the ledger should have zero balances.
11. Closing revenue and expense accounts to the Income Summary account is an optional bookkeeping procedure.
12. Closing the dividends account to Retained Earnings is not necessary if net income is greater than dividends during the period.
13. The dividends account is a permanent account whose balance is carried forward to the next accounting period.
14. Closing entries are journalized after adjusting entries have been journalized.
15. The amounts appearing on an income statement should agree with the amounts appearing on the post-closing trial balance.
17. A business entity has only one accounting cycle over its economic existence.
18. The accounting cycle begins at the start of a new accounting period.
19. Both correcting entries and adjusting entries always affect at least one balance sheet account and one income statement account.
20. Correcting entries are made any time an error is discovered even though it may not be at the end of an accounting period.
21. An incorrect debit to Accounts Receivable instead of the correct account Notes Receivable does not require a correcting entry because total assets will not be misstated.
22. In a corporation, Retained Earnings is a part of owners' equity.
23. A company's operating cycle and fiscal year are usually the same length of time.
24. Cash and office supplies are both classified as current assets.
25. Long-term investments would appear in the
8. Closing entries are not needed if the business plans to continue operating in the future and issue financial statements each year.
9. The dividends account is closed to the Income Summary account in order to properly determine net income (or loss) for the period.
10. After closing entries have been journalized and posted, all temporary accounts in the ledger should have zero balances.
11. Closing revenue and expense accounts to the Income Summary account is an optional bookkeeping procedure.
12. Closing the dividends account to Retained Earnings is not necessary if net income is greater than dividends during the period.
13. The dividends account is a permanent account whose balance is carried forward to the next accounting period.
14. Closing entries are journalized after adjusting entries have been journalized.
15. The amounts appearing on an income statement should agree with the amounts appearing on the post-closing trial balance.
17. A business entity has only one accounting cycle over its economic existence.
18. The accounting cycle begins at the start of a new accounting period.
19. Both correcting entries and adjusting entries always affect at least one balance sheet account and one income statement account.
20. Correcting entries are made any time an error is discovered even though it may not be at the end of an accounting period.
21. An incorrect debit to Accounts Receivable instead of the correct account Notes Receivable does not require a correcting entry because total assets will not be misstated.
22. In a corporation, Retained Earnings is a part of owners' equity.
23. A company's operating cycle and fiscal year are usually the same length of time.
24. Cash and office supplies are both classified as current assets.
25. Long-term investments would appear in the