Question

1

Cash is a temporary account and it should be zero after all closing entries have been posted.

True

False

2

The accounting cycle begins at the start of a new accounting period.

True

False

3

Crane Company has the following year-end account balances on November 30, 2017: Service Revenue $37,000; Insurance Expense $2,700; Rent Expense $8,000; Supplies Expense $1,350; L. Wilfrid, Capital $42,000; and L. Wilfrid, Drawings $28,000.

Prepare the closing entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Nov. 30     Insurance Expense    Income Summary    No Entry    L. Wilfrid, Capital    L. Wilfrid, Drawings    Rent Expense    Supplies Expense    Service Revenue         Insurance Expense    Income Summary    No Entry    L. Wilfrid, Capital    L. Wilfrid, Drawings    Rent Expense    Supplies Expense    Service Revenue     (To close revenue account) Nov. 30     Insurance Expense    Income Summary    No Entry    L. Wilfrid, Capital    L. Wilfrid, Drawings    Rent Expense    Supplies Expense    Service Revenue         Insurance Expense    Income Summary    No Entry    L. Wilfrid, Capital    L. Wilfrid, Drawings    Rent Expense    Supplies Expense    Service Revenue         Insurance Expense    Income Summary    No Entry    L. Wilfrid, Capital    L. Wilfrid, Drawings    Rent Expense    Supplies Expense    Service Revenue         Insurance Expense    Income Summary    No Entry    L. Wilfrid, Capital    L. Wilfrid, Drawings    Rent Expense    Supplies Expense    Service Revenue     (To close expense accounts) Nov. 30     Insurance Expense    Income Summary    No Entry    L. Wilfrid, Capital    L. Wilfrid, Drawings    Rent Expense    Supplies Expense    Service Revenue         Insurance Expense    Income Summary    No Entry    L. Wilfrid, Capital    L. Wilfrid, Drawings    Rent Expense    Supplies Expense    Service Revenue     (To close income summary) Nov. 30     Insurance Expense    Income Summary    No Entry    L. Wilfrid, Capital    L. Wilfrid, Drawings    Rent Expense    Supplies Expense    Service Revenue         Insurance Expense    Income Summary    No Entry    L. Wilfrid, Capital    L. Wilfrid, Drawings    Rent Expense    Supplies Expense    Service Revenue     (To close drawings account)

Calculate the balance in L. Wilfrid, Capital after the closing entries are posted. Closing balance $

Answer 1

1) FALSE

Cash is a current asset

2) True

one accounting cycle is one accounting period

3)

		Debit	Credit
Nov 30	Service Revenue	37000
	Income summary		37000
	(To close Revenue)
	Income summary	12050
	Insurance Expenses		2700
	Rent Expense		8000
	Supplies expense		1350
	(To close Expense)
	Income summary	24950
	L.willfrid Capital		24950
	(To close Income summary)
	L. Wilfrid, Capital	28000
	L. Wilfrid, Drawing		28000
	(To close drawings account)

L.Wilfrid Capital

	$
Balance	42000
Add: Profit	24950
Less: Drawings	(28000)
	38950