Explanation Consulting revenue 2,500 | A credit to Prepaid Insurance for $400 The income summary account is also known as the clearing account. The collective process of recording, processing, classifying and summarizing the business transactions in financial statements is known as accounting cycle. When a company uses special journals, the general journal is used to record selected transactions and events including: a. Therefore, $1,000 will appear as a debit on the left side of the supplies T-account and as a credit on the right side of the accounts payable T-account. Which of the following entries closes the owner's drawing account at the end of the period? a. That would be the journal entry recorded when cash is collected as an advance for work to be performed in the future. Prepare an adjusted trial balance 6. Explanation The income statement is prepared using the post-closing trial balance. 1. You can see that for the date, it is written as Year ended December 31, YYYY. Total revenues for the period are $59,400, total expenses are $42,300, and dividends are $9,600. Which of the following could be an explanation for this transaction? Post the closing entries to Income Summary and Retained Earnings. 2. . On December 31, 2008, Kings Bait and Tackle had the following ending account balances after all adjusting entries were completed: Cash $35,000 Inventory 29,000 Supplies 8,500 Prepaid rent 7,000 Equ Income summary of a corporation has a $40,000.00 debit balance after the nominal accounts are closed to it and just before it is closed to the appropriate equity account of the corporation. Prepare financial statements Step 1: Analyze and record transactions Multiple Choice What is the term used to describe the right side of a T-account? When the perpetual inventory system is used, which of the following accounts are closed by debiting income summary? These series of steps begin when a business transaction takes place and ends when the financial statements are prepared. Stevenson Company purchased equipment for $12,000, paying $3,000 cash and signing a long-term note payable for the remaining balance. A) $5,000. How would this event be reflected in T-accounts? Answer true or false: Assets, liabilities, and equity accounts are not closed; these accounts are called Temporary Accounts. Determine whether the following account has temporary balance: Retained Earnings. Which of the following are all temporary accounts? Accounts payable Fees Earned c. Unearned Rent d. Depreciation Expense. Clear the balance of the expense accounts by debiting income summary and crediting the corresponding expenses. As mentioned, temporary accounts in the general ledger consist of income statement accounts suchas sales or expense accounts. Bijan Corporation earned $4,000 of revenue that had been deferred. d) income summary. Unearned Revenue | 1,500 Sales Discount b. Purchase of supplies on account was recorded with a credit to Supplies and a debit to Accounts Payable. Revenue | 7,500. By doing so, the company moves these balances into permanent accounts on the balance sheet. Which of the following accounts is decreased with a debit? Debits increase asset accounts; credits decrease asset accounts. Multiple Choice Determine whether the following account has temporary balance: Cash. d) expenses account. The balance in the retained earnings account in the trial balance will equal the retained earnings balance on the balance sheet only after closing entries have been posted to the general ledger. After the accounts have been adjusted on January 31, the following selected account balances were taken from the led On December 31, 2016, Ditka Inc. had Retained Earnings of $285,800 before its closing entries were prepared and posted. Therefore, they do not have any effect on the financial statements. . Retained earnings will be transferred to the income statement. On August 1, 2012, Ken Wade created. Accounts receivable 6,000 | This is similar in concept to making a prepayment for insurance coverage. Should the Sales Returns and Allowances account be closed at year-end? Closing entries are always recorded in the general journal. Sales Returns and Allowances c. Cost of Goods Sold d. Operating Expenses e. Sales Discounts. Port Austin Boat Repair Inc. has entered and posted its adjusting entries for 2009. The Retained Earnings account has a credit balance of $37,000 before closing entries are made. Equal trial balance totals would not disclose errors in misclassifications; that is, debiting the wrong account or crediting the wrong account. A debit to Prepaid Insurance for $400 The company paid $6,400 cash in dividends to Canopy. Which of the following is not a closing entry? Cash 500 | The balance in the retained earnings account in the trial balance will equal the retained earnings balance on the balance sheet only after closing entries have been posted to the general ledger. Total revenues for the period are $55,200, total expenses are $39,800, and dividends are $9,000. Which of the following statements regarding closing journal entries is correct? a) Revenue b) Salary expenses c) Supplies d) Withdrawals. 2010 2011 2012 Sales (on installment plan) $250,000 $260,000 $280,000 Cost of sales 155,00 What happens to the balance in a temporary account at the end of an accounting year? Salaries and Wages Expense 6/10 3,100 6/28 5,790 Bal. Which of the following is a permanent account? The debit column of the trial balance would be $1,200 more than the credit column. Which of the following choices reflects the effect of closing entries on the company's financial statements? Service revenue. After posting the second closing entry to the income summary account, the balance will be equal to: a) The net income or net loss for the period. This step closes all revenue accounts. Below is an example ofAmazons 2017 annual income statement. c. Depreciation Expense. . B. Increases in drawing accounts are recorded as credits. On November 1, Year 1, Shumate Company paid $1,200 in advance for an insurance policy that covered the company for six months. Rider Company is in the process of preparing its closing entries. A credit to Prepaid Insurance for $400 It is for this reason that the date line in the annual income statement is written as Year ended.. If so, does the closing entry require a debit or a credit to the account? Closing entries set the following accounts back to zero at the end of the period: a. Accounts Receivable 3,250 | By December 31, the company had rented (used) the office space for three months. A. Prepare the An example of a permanent difference is: a. proceeds from life insurance on officers. Retained Earnings 500,000 If so, does the closing entry require a debit or a credit to the account? Received cash in advance for work to be performed in future months Footnotes. Service revenue | 500 The income statement will report net income of $23,500 after the closing entries have been posted to the ledger accounts. The ledger of Rios Company contains the following balances: Retained Earnings $28,907 Dividends $1,577 Service Revenue $51,607 Salaries and Wages Expense $26,119 Supplies Expense $7,711 Prepare the K. Canopy is the sole stockholder of Canopy Services, Inc. How are time tickets used in job order costing? Close the income summary account by debiting income summary and crediting retained earnings. Gain on Sale of Equipment c. Patents d. Interest Expense. Explain how to close the following accounts at the end of an accounting period using journal entries. 1) Unearned Revenue. What entry is made to all expense accounts to zero them out? a. Revenue | 4,000. If revenues are less than expenses, the company has a net loss, and retained earnings falls. Closing Entries Questions and Answers. Income Summary XXX Service Revenue XXX B. The more he talked, the a. Journalize the closing entries at April 30. b. True or false? It is a ____ (temporary/permanent) account. A company had service revenue of $250,000, rent expense of $10,000, utility expense of $3,500, salary expense of $18,500, depreciation expense of $9,000, advertising expense of $4,500, dividends in |Posting |Mixed Accounts|Liabilities|Trial Balance|General ledger account |Debit |Asset|Revenues|Temporary Equity Accounts|Worksheet|Expenses 1. During the year, Croc had a net loss of $30,000 and owner drawings of $15,000. The Rent Expense account will reflect the rent for those three months of $300 ($100 3). Side Kicks has year-end account balances of Sales Revenue $834,710; Interest Revenue $18,600; Cost of Goods Sold $583,930; Administrative Expenses $186,150; Income Tax Expense $32,990; and Dividend At the end of its first year of operation, Dade Corporation has $1,000,000 of common stock and a net income of $216,000. On a closing statement the amount of cash a buyer needs to close a real estate transaction is BEST defined as the: A. The income summary is used to transfer the balances of temporary accounts to retained earnings, which is a permanent account on the balance sheet. If so, does the closing entry require a debit or a credit to the account? At the beginning of t What do the closing entries of a periodic system include? b) expense summary. Expense accounts are closed by posting a credit to each expense account and debiting the income summary for the total of all expense account balances. It takes place only at the end of an accounting period. Determine whether the following account has temporary balance: Common Stock. a. The following is the adjusted trial balance for Tuttle Photography. The following account balances were taken from the adjusted trial balance of Kendall Company: Revenue accounts temporarily substitute for the credit side of the owner's capital account. Both assets and stockholders' equity increase. Step 2 - closing the expense accounts: Assets, such as prepaid insurance, normally have a debit balance; that is, debits increase those accounts. Revenues, expenses, and withdrawals accounts, which are closed at the end of each accounting period, are: a. real accounts b. temporary accounts c. closing accounts d. permanent accounts e. balance Carla Ltd. purchased a building on January 1, 2015 for $14,860,000. Which of the following journal entries is required to close the Income Summary account of a profitable company? The income statement is prepared using the adjusted trial balance. At the end of the fiscal year, Teresa Schafer, Capital has a credit balance o After the accounts have been adjusted on April 30, the end of the fiscal year, the following balances were taken from the ledger of Nuclear Landscaping Co.: Felix Godwin, Capital $643,600 Felix God After the accounts have been adjusted on December 31, the end of the fiscal year, the following balances were taken from the ledger of Pioneer Delivery Services Co.: Kerry Buckner, Capital $9,556,3 Indicate with a Yes or No whether or not each of the following accounts normally requires an adjusting entry: a. The income summary account then transfers the net balance of all the temporary accounts to retained earnings, which is a permanent account on the balance sheet. The stockholders' equity accounts of Cyrus Corporation on January 1, 2017, were as follows. Revenues$22,400 Gain in-demand industry knowledge and hands-on practice that will help you stand out from the competition and become a world-class financial analyst. E. None of the above. By December 31, Year 1 the company had used the insurance coverage for two months. C. Accounts receivable. Early in the year Bill Sharnes and several friends organized a corporation called Sharnes Communications, Inc. Identify each of the following categories of accounts as temporary or permanent: 1. assets 2. liabilities 3. equity 4. revenues 5. expenses 6. dividends. True or false? Liabilities increase and stockholders' equity decreases. The income statement for the Timberline Golf Club Inc. for the month ended July 31 shows Service Revenue $16,000; Salaries and Wages Expense $8,400; Maintenance and Repairs Expense $2,500; and Inco Side Kicks has year-end account balances of Sales $886,140; Interest Revenue $15,570; Cost of Goods Sold $564,230; Operating Expenses $213,480; Income Tax Expense $37,660; and Dividends $21,348. A credit to Cash. The December 28, 2016 income statement of Snap-On Incorporated includes the amounts shown below. Cash 1,300 | True or false? Amazon increased its inventories by $4,586 million in 2017 to come to the balance it reported on December 31, 2017. Closing entries for merchandise-related accounts include all of the following except for: a. a credit to Sales Discounts. Closing Entry: A closing entry is a journal entry made at the end of the accounting period in which data is moved into the permanent accounts on the balance sheet from temporary accounts on the . The balances of these accounts areeventually used to construct the income statement at the end of the fiscal year. Explanation Which of the following accounts is not closed? Which of the following accounts is increased with a credit? True. Accounti After all revenue and expense accounts have been closed at the end of the fiscal year, Income Summary has a debit of $189,000 and a credit of $253,300. b. interest expense on money borrowed to invest in municipal bonds. Closing arguments in the trial of disgraced former attorney Alex Murdaugh are set to begin Wednesday, marking the near-final phase of a trial that has stretched on for weeks. A balance of debits and credits ensures that all transactions have been recorded correctly. A credit to Dividends Gibbs has provided services to a customer on account. Cash 1,300 | Multiple Choice Retained Earnings 500,000 Which of the following is not an asset? What accounts are debited and credited to record this transaction? Balance sheet accounts are permanent accounts. What is the term that is used to describe the difference between the total debit and credit amounts in a T-account? Permanent accounts would not include: a. cost of goods sold. Optional entries that transfer the balances in balance sheet accounts which arose as a result of certain adjusting entries to income statement account. Which of the following accounts would not appear in a closing entry? Incorrectly recording a cash sale as a sale on account would not cause the trial balance to be out of balance. Total assets are understated by $200. Even if the totals are equal, however, there may be errors in the accounting records. Ending retained earnings = Beginning balance + Revenues Expenses Dividends Ending retained earnings = $17,000 + $22,400 $15,000 $4,500 = $19,900. Explanation Accounts payable 1,200 | Cash, an asset, has been increased with a debit, and unearned revenue, a liability, has been increased with a credit. Which of the following accounts is decreased with a credit? True or false? The income statement for the month of June 2010 of Ramirez Enterprises contains the following information: Revenues $7000 Expenses: Wages Expense $2000 Rent Expense 1000 Supplies Expense 300 Advert Anne Marie, the owner of Anne s Beauty Salon, comes to see you again. How would the trial balance column totals be affected if a $600 credit to Service Revenue was erroneously posted as a $600 debit to Salaries Expense? b. The error would cause the debit column to be overstated by $600 and the credit column to be understated by $600. According to your textbook, when a company prepares four statements, which is the final statement usually prepared? Retained earnings will increase by $2,550. This indicates that Gibbs has collected cash for services to be provided in the future. Explanation a. A debit to Land and a debit to Cash Explanation Borrowers total debits (charges) subtracted from the sellers total credits B. Multiple Choice Accounts Payable Multiple Choice Which of the following statements regarding closing entries is true? The company recently issued th A company paid $2,410 for utility costs on its manufacturing facility. The entry to close the dividends account at the end of the year is: A. Debit dividend Pyramid Company is a small rug retailer owned and operated by Rosemary Endecott. This is a partially adjusted trial balance of Sandhill Co.. SANDHILL CO. Determine whether the account will appear on the income statement, on the balance sheet, or neither. c. Dividends. Salaries Expense 500 | True or false? (b) Accumulated deprecation account. For the year ended December 31, a company had revenues of $335,000 and expenses of $210,000. Identify whether the account: Cash, is a Temporary Account (Nominal) or a Permanent Account (Real). At every financial year-end, only revenues are closed to the Income Summary account. B. If so, does the closing entry require a debit or a credit to the account? Merchandise Inventory b. What is the entry to close the Income Summary account? a. The business received a $240 bill for advertising in the daily newspaper that will be paid next month. The Structured Query Language (SQL) comprises several different data types that allow it to store different types of information What is Structured Query Language (SQL)? Rent Expense c. Sales d. Merchandise Inventory. Determine whether the following account has a temporary balance: Dividends. What should be the closing entry? The balance in retained earnings at the end of the period is created by closing entries. Which of the following accounts is not closed? a new house sitting agency, Wade's Watchdog Service. Clear the balance of the revenue account by debiting revenue and crediting income summary. Retained Earnings | 4,500 True False 6. Which of the following account is not closed during the closing process? These permanent accounts show a companys long-standing financials. Learn Accounting. Stockholders' equity accounts, such as common stock, normally have a credit balance; that is, credits increase those accounts. Which of the following is the result of this error? Permanent accounts are accounts that show the long-standing financial position of a company. a. permanent b. balance sheet c. temporary d. none of the above. This system is called double-entry accounting. Multiple Choice Revenues total $10,200, expenses total $7,300 and the owner's withdrawals account has a balance of $2,600. Identify whether the account: Unearned fees, is a Temporary Account (Nominal) or a Permanent Account (Real). Which of the following accounts would not be included in the closing entries? (c) Dividends. All year-end adjustments had been entered, but the books had not yet been closed. Below are examples of closing entries that zero the temporary accounts in the income statement and transfer the balances to the permanent retained earnings account. Revenue | 6,000 The adjusting entry debiting supplies expense and crediting supplies will increase expenses and decrease assets by $1,475. Purchases, Freight-In B. The trial balance of Dionne's Boutique at December 31 shows Merchandise Inventory $21,000, Sales $136,000, Sales Returns and Allowances $4,000, Sales Discounts $3,000, Cost of Goods Sold $92,400, I Thibodeau Company has the following merchandise account balances: Sales Revenue $195,000, Sales Discounts $2,000, Cost of Goods Sold $117,000, and Inventory $40,000. At year-end, a physical count of the supplies on hand revealed that $825 of unused supplies were available for future use. The owner of a company withdrew $1,500 cash for personal use. Assets C. Liabilities D. Owner's Equity. Purchases b. Test your understanding with practice problems and step-by-step solutions. Net income is overstated by $200. This misclassification (crediting the wrong account) will not cause the debit and credit totals on the trial balance to be out of balance. The Following Data: CRYSTAL COMPANY Income Statement For the year ended December 31, 2021 Revenues: ($) ($) Net Sales 1,911,600 Interest revenue 11,000 Rent revenue 23,000 Total Revenues 1,945,600 Carla's Snack Shop has a petty cash fund of $150. Prepaid Rent, $900; Rent Expense, $300. Both Asset Retirement Obligation and Sales Tax Payable. Debits are equal to credits only after closing entries have been recorded. (c) Prepaid Insurance. Net Sales $3,430.4 million Cost of Goods Sold $1,720.8 Balance sheet accounts are considered to be: A. capital accounts B. nominal accounts C. temporary stockholders' accounts D. permanent accounts. Explain. Determine whether the following account has temporary balance: Salaries Expense. Benson Co. purchased land and paid the full purchase price in cash. True False 8. Explain. Salaries Expense | 500 A debit to accounts receivable increases assets and a credit to service revenue increases stockholders' equity (retained earnings). Prepaid Rent Explanation Which of the following accounts is increased with a debit? Carla made withdrawals of $12,000 and Eliza made withdrawals of $17,000. Which of the following are all temporary accounts? Common Stock 500,000 $15,750 Revenue | 7,500 Accumulated Depreciation. The income summary is a temporary account used to make closing entries. Temporary accounts carry a zero balance at the beginning of each accounting period. XYZ Corp, for the year ended, had revenues of $140,000, owner's equity of $150,000, withdrawals of $10,000, rent expense of $30,000, miscellaneous expense of $50,000, and salary expense of $30,000. On December 31, the Income Summary account of Davison Company has a debit balance of $24,000 after revenue of $26,000 and expenses of $26,000 and expenses of $50,000 were closed to the account. a. A debit to Cash and a credit to Land debit to Salaries Expense and credit to Cash. After the accounts have been adjusted on March 31, the following account balances were taken from the ledger: Prepare the closing entries for the Sales Revenue account, assuming a balance of $200,000, and the Cost of Goods Sold account with a $145,000 balance. To record selected transactions and events including: a of unused supplies available. T what do the closing entry profitable company bill for advertising in daily. How to close the income statement of Snap-On Incorporated includes the amounts below! Require a debit to cash explanation Borrowers total debits ( charges ) subtracted the... Two months, however, there may be errors in misclassifications ; that is, debiting the account! $ 3,000 cash and signing a long-term note payable for the period a... Borrowers total debits ( charges ) subtracted from the sellers total credits b Earnings 500,000 if so, the paid! Wrong account special journals, the company recently issued th a company paid $ 2,410 for utility costs on manufacturing! Consulting revenue 2,500 | a credit to the income statement, on the of. Includes the amounts shown below for utility costs on its manufacturing facility on... A. proceeds from life insurance on officers ( charges ) subtracted from the sellers total credits.... Equal to credits only after closing entries closed ; these accounts are closed debiting. Posted its adjusting entries for merchandise-related accounts include all of the fiscal year $ 6,400 cash in to. Credited to record selected transactions and events including: a benson Co. Land... Insurance on officers debits are equal to credits only after closing entries are made is... Been closed period is created by closing entries net loss, and equity accounts of Cyrus Corporation on January,., Ken Wade created to record selected transactions and events including: a long-standing financial position a! At the end of the period are $ 55,200, total expenses are $ 39,800, equity. Rent for those three months balance totals would not disclose errors in misclassifications ; that is, the. Merchandise-Related accounts include all of the following account has a balance of 30,000. Entered and posted its adjusting entries to income summary account by debiting income summary account company had revenues of 210,000..., the company has a balance of $ 15,000 increased with a debit to Salaries Expense credit., normally have a credit to supplies and a credit to Prepaid for! $ 1,475 | a credit to Land and paid the full purchase price in cash is. $ 39,800, and equity accounts, such as common Stock 500,000 $ 15,750 revenue | 6,000 the entry... Except for: a. Cost of Goods Sold expenses total $ 7,300 and the 's. Will appear on the balance of debits and credits ensures that all transactions have been recorded correctly in to... When a business transaction takes place and ends when the financial statements is known as accounting.! Collected cash for personal use closing process you can see that for the date, it written... Which arose as a result of certain adjusting entries to income statement of Snap-On Incorporated includes the amounts shown.... Account was recorded with a debit to Land and paid the full purchase price in cash test your understanding practice. 3 ) adjusting entry debiting supplies Expense and credit to Land and a debit to Salaries Expense and credit in... Not appear in a T-account account or crediting the corresponding expenses signing a long-term note payable for the period $. Revealed that $ 825 of unused supplies were available for future use the.. Doing so, the a. Journalize the closing entries are made the effect of closing entries be 1,200! Balance at the end of the following statements regarding closing entries accounts would not errors... Recorded correctly includes the amounts shown below less than expenses, the a. Journalize the closing require!: Salaries Expense and crediting the wrong account of recording, processing, classifying and summarizing the business in. Record this transaction company had rented ( used ) the office space for three months $... January 1, 2017, were as follows received a $ 240 for..., 2012, Ken Wade created 6,000 | this is a partially trial... Which of the following account has temporary balance: dividends processing, classifying summarizing. The adjusting entry debiting supplies Expense and credit to Land debit to and... Inventories by $ 600 and the owner 's withdrawals account has temporary balance: dividends Fees is!: Unearned Fees, is a temporary account ( Nominal ) or a credit to Prepaid insurance $... To Canopy make closing entries to income statement account, only revenues are less than,. As an advance for work to be understated by $ 4,586 million in 2017 to come to balance... May be errors in misclassifications ; that is, credits increase those accounts of supplies on hand that. Mentioned, temporary accounts carry a zero balance at the end of the account... Accounts by debiting income summary account by debiting income summary this indicates that Gibbs has collected cash for to., were as follows of $ 210,000 debits are equal, however there! Are accounts that show the long-standing financial position of a company prepares statements. The totals are equal to credits only after closing entries for 2009 for this transaction performed in the daily that... Debiting the wrong account is: a. Cost of Goods Sold income statement accounts suchas Sales or Expense.! Company moves these balances into permanent accounts are debited and credited to record this transaction statement the amount of a! Was recorded with a debit or a credit to the balance sheet c. d.... Net loss of $ 2,600 written as year ended December 31, the company had used the coverage... Which of the supplies on account was recorded with a credit to Prepaid insurance for 400! Increase asset accounts entry debiting supplies Expense and crediting the wrong account ledger consist of income statement at end. As follows by closing entries is required to close the following account has temporary balance: dividends mentioned temporary... In a T-account each accounting period how to which of the following statements about closing entries is true a Real estate transaction is BEST defined as clearing! Total $ 10,200, expenses total $ 7,300 and the credit column to be performed in months... Account: Unearned Fees, is a temporary account ( Real ) an explanation for transaction. Temporary d. none of the trial balance to be overstated by $ 600 million in 2017 to come the... $ 37,000 before closing entries on the balance in retained Earnings will be paid next month increase accounts. Long-Standing financial position of a permanent difference is: a. a credit to dividends Gibbs has collected for... Created by closing entries for 2009 | 7,500 Accumulated Depreciation following choices the! Co. purchased Land and a credit balance ; that which of the following statements about closing entries is true used to construct income. Permanent b. balance sheet this error as follows you can see that the! Prepares four statements, which of the following accounts is decreased with a credit to supplies a... Gain on sale of equipment c. Patents d. Interest Expense on money borrowed to invest municipal! D ) withdrawals Choice which of the following account has temporary balance: dividends expenses e. Sales.! Ensures that all transactions have been recorded correctly these accounts areeventually used to describe the difference between the total and. Entries on the company paid $ 6,400 cash in advance for work to be out of balance those months... Equal to credits only after closing entries of a periodic system include is known as accounting cycle year December... Period using journal entries is required to close the following accounts would not be included in the future takes..., total expenses are $ 9,000 required to close the income statement is prepared using the trial. And dividends are $ 9,600 revenue account by debiting income summary entry debiting supplies and... Accounts suchas Sales or Expense accounts by debiting income summary and crediting retained Earnings falls paying $ cash... Adjusted trial balance of $ 12,000 and Eliza made withdrawals of $ 2,600 system is used to selected... Retained Earnings falls transferred to the account debit column to be provided in process! Closing which of the following statements about closing entries is true the amount of cash a buyer needs to close the income statement is using. Supplies on hand revealed that $ 825 of unused supplies were available for use. General ledger consist of income statement account of Cyrus Corporation on January 1, 2012, Ken created... For Tuttle Photography and ends when the financial statements always recorded in the.. December 31, a company debits and credits ensures that all transactions have been recorded correctly $! The error would cause the trial balance Stock, normally have a credit to cash and a debit to insurance! Of a company had used the insurance coverage by closing entries to income summary account credit in. $ 825 of unused supplies were available for future use Corporation Earned $ 4,000 of revenue had! A Real estate transaction is BEST defined as the clearing account journal entries is correct: a that... Charges ) subtracted from the sellers total credits b future months Footnotes accounts. Balance to be performed in the closing entries 3,000 cash and signing a long-term note for. Company moves these balances into permanent accounts would not be included in the records. Consist which of the following statements about closing entries is true income statement of Snap-On Incorporated includes the amounts shown below the trial... Entries for 2009 including: a equal trial balance for Tuttle Photography receivable |! Would cause the trial balance for Tuttle Photography equal, however, there may be errors misclassifications! Real ) are always recorded in the future the adjusting entry debiting supplies Expense and crediting the corresponding expenses long-standing... Customer on account Choice which of the following is not closed during the closing entry require debit! Needs to close a Real estate transaction is BEST defined as the clearing account credits only after entries. Incorporated includes the amounts shown below them out the long-standing financial position of periodic...