• Cash 
• Accounts Receivable
• Supplies

• Equipment (Less accumulated depreciation)
• Land 
• Building (Less accumulated depreciation)

• Capital Stock
• Retained Earnings

In the Income Statement you include the Depreciation Expense as part of an expese item. 

True 

False

After all revenue and expense accounts have been closed at the end of the year, Income Summary has a debit of $178,800 and a credit of $239,600. At the same date, Retained Earnings has a credit balance of $277,000 and Dividends has a balance of $23,200.

Journalize the entries required to (a.) close net income or net loss and (b.) close the Dividends account.

a.

Income Summary       60,800

     Retained Earnings                 60,800

*Side note:  239,600 - 178,800 = 60,800

b. 

Retained Earnings      23,200

      Dividends                         23,200  

Close the Following Accounts:

• Close Revenues
• Close Expenses
• Close Net Income/Net Loss
• Close Dividends

Fees Earned

Rent Revenue 

      Income Summary

Income Summary

     Wages Expense

     Rent Expense

     Supplies Expense

Income Summary

     Retained Earnings 

Retained Earnings

     Dividends

1. Transactions are analyzed and recored in the journal. 
2. Transactions are posted to the ledger.
3. An unadjusted trial balance is prepared.
4. Adjustment data are assembeled and anayzed.
5. An optional end of period spreadsheet (worksheet) is prepared. 
6. Adjsuting entries are journzalized and posted to the ledger. 
7. An adjusted trial balance is prepared. 
8. Financial statements are prepared.
9. Closing entries are journalized and posted to the ledger. 
10. A post-closing trial balance is prepared.

Current Ratio 

(Equation)

Working Capital 

(Equation)

Rent Revenue has a normal balance of credit.

True 

False