Chapter 8 Recording Closing Entries and Preparing a Post-Closing Trial Balance for a Service Business • 159
Study
Guide
8
Name Perfect
Score
Your
Score
Identifying Accounting Terms 5 Pts.
Analyzing Accounts Affected by Adjusting and Closing Entries 10 Pts.
Analyzing Closing Entries 10 Pts.
Identifying the Accounting Cycle for a Service Business 8 Pts.
Total 33 Pts.
Part One—Identifying Accounting Terms
Directions: Select the one term in Column I that best fits each definition in
Column II. Print the letter identifying your choice in the Answers column.
Answers
1.
2.
Column I
A. accounting cycle
B. closing entries
Column II
1. Accounts used to accumulate information from one fiscal
period to the next. (p. 214)
2. Accounts used to accumulate information until it is
transferred to the owner’s capital account. (p. 214)
C
E
160 • Working Papers
Part Two—Analyzing Accounts Affected by Adjusting
and Closing Entries
Directions: Use the partial chart of accounts given below. For each closing entry
described, decide which accounts are debited and credited. Write the account
numbers identifying your choice in the proper Answers column.
Account Titles Acct. No.
K. Schenk, Capital 310
K. Schenk, Drawing 320
Income Summary 330
Accounts to Be
Debited Credited
1–2. Closing entry for Sales. (p. 217) 1. 2.
3–4. Closing entry for all expense accounts. (p. 219) 3. 4.
TE
510, 520, 550
410
330
330
Chapter 8 Recording Closing Entries and Preparing a Post-Closing Trial Balance for a Service Business • 161
Name Date Class
Part Three—Analyzing Closing Entries
Directions: For each of the following items, select the choice that best completes the
statement. Print the letter identifying your choice in the Answers column.
1. Which accounting concept applies when a work sheet is prepared at the end of each
fiscal cycle to summarize the general ledger information needed to prepare financial
statements? (A) Business Entity (B) Accounting Period Cycle (C) Going Concern
(D) Full Disclosure. (p. 214)
2. The ending account balances of permanent accounts for one fiscal period are (A) the
same as the prior period’s ending balance (B) equal to the capital account balance (C) all
equal to zero (D) the beginning account balances for the next fiscal period. (p. 214)
3. Which of the following accounts is a temporary account? (A) Cash (B) Accounts Payable
(C) Clyde Sullivan, Capital (D) Rent Expense. (p. 214)
Answers
1.
2.
3.
B
D
D
Part Four—Identifying the Accounting Cycle for a Service
Business
Directions: Arrange the series of accounting activities listed below for the accounting
cycle for a service business. Indicate the sequence of the steps by writing a number
from 1 to 8 to the left of each activity. (p. 228)
A work sheet, including a trial balance, is prepared from the general ledger.
Transactions, from information on source documents, are recorded in a journal.
Source documents are checked for accuracy, and transactions are analyzed into debit
and credit parts.
Answers
1.
2.
3.
4
2
1
Name Date Class
8-1 WORK TOGETHER, p. 222
Journalizing and posting closing entries
5678
ACCOUNT TITLE
INCOME STATEMENT BALANCE SHEET
DEBIT CREDIT
DEBIT CREDIT
1Cash 4 9 0 0 00 1
2Petty Cash 7 5 00 2
3Accounts Receivable—B. Widell 1 3 8 7 00 3
4Supplies 7 5 00 4
5Prepaid Insurance 2 5 0 00 5
6Accounts Payable—Southside Supplies 2 6 7 00 6
7Connor Whitney, Capital 7 4 4 3 00 7
8Connor Whitney, Drawing 1 7 0 0 00 8
9Income Summary 9
20 20
21 21
22 22
23 23
24 24
25 25
26 26
27 27
28 28
29 29
164 • Working Papers
8-1 WORK TOGETHER (continued)
GENERAL JOURNAL PAGE
DATE ACCOUNT TITLE DOC.
NO.
POST.
REF.
GENERAL
DEBIT CREDIT
6 6
7 7
8 8
9 9
10 10
11 11
12 12
21 21
22 22
23 23
24 24
25 25
26 26
27 27
28 28
TE
Closing Entries
30 Sales 410 2 1 6 0 00
Income Summary 330 2 1 6 0 00
30 Income Summary 330 1 4 8 3 00
Advertising Expense 510 4 6 0 00
Cash Short and Over 520 6 00
Insurance Expense 530 1 2 5 00
8
Chapter 8 Recording Closing Entries and Preparing a Post-Closing Trial Balance for a Service Business • 165
8-1 WORK TOGETHER (continued)
GENERAL LEDGER
ACCOUNT Cash ACCOUNT NO. 110
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
20–
Apr. 30 Balance ✔4 9 0 0 00
ACCOUNT Accounts Receivable—B. Widell ACCOUNT NO. 130
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
20–
Apr. 30 Balance ✔1 3 8 7 00
ACCOUNT Prepaid Insurance ACCOUNT NO. 150
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
20–
Apr. 30 Balance ✔2 5 0 00
166 • Working Papers
8-1 WORK TOGETHER (continued)
ACCOUNT Connor Whitney, Capital ACCOUNT NO. 310
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
20–
Apr. 30 Balance ✔7 4 4 3 00
ACCOUNT Income Summary ACCOUNT NO. 330
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
TE
30 G8 6 7 7 00 8 1 2 0 00
30 G8 1 7 0 0 00 6 4 2 0 00
20–
Apr. 30 G8 2 1 6 0 00 2 1 6 0 00
30 G8 1 4 8 3 00 6 7 7 00
30 G8 6 7 7 00
Chapter 8 Recording Closing Entries and Preparing a Post-Closing Trial Balance for a Service Business • 167
ACCOUNT Insurance Expense ACCOUNT NO. 530
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
20–
Apr. 30 Balance ✔1 2 5 00
8-1 WORK TOGETHER (concluded)
ACCOUNT Advertising Expense ACCOUNT NO. 510
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
20–
Apr. 30 Balance ✔4 6 0 00
ACCOUNT Supplies Expense ACCOUNT NO. 550
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
20–
Apr. 30 Balance ✔1 5 3 00
30 G8 4 6 0 00
30 G8 1 2 5 00
30 G8 1 5 3 00
8-1 ON YOUR OWN, p. 222
Journalizing and posting closing entries
5678
ACCOUNT TITLE
INCOME STATEMENT BALANCE SHEET
DEBIT CREDIT
DEBIT CREDIT
1Cash 13 6 0 0 00 1
2Petty Cash 1 5 0 00 2
3Accounts Receivable—Eat Right Eatery 2 9 9 6 00 3
10 Sales 8 2 8 0 00 10
11 Advertising Expense 9 1 0 00 11
12 Cash Short and Over 2 00 12
13 Insurance Expense 1 3 0 00 13
14 Miscellaneous Expense 3 7 8 00 14
15 Supplies Expense 2 3 6 00 15
22 22
23 23
24 24
25 25
26 26
27 27
28 28
29 29
Chapter 8 Recording Closing Entries and Preparing a Post-Closing Trial Balance for a Service Business • 169
8-1 ON YOUR OWN (continued)
GENERAL JOURNAL PAGE
DATE ACCOUNT TITLE DOC.
NO.
POST.
REF.
GENERAL
DEBIT CREDIT
6 6
7 7
8 8
9 9
10 10
11 11
12 12
22 22
23 23
24 24
25 25
26 26
27 27
28 28
Closing Entries
31 Sales 410 8 2 8 0 00
Income Summary 330 8 2 8 0 00
31 Income Summary 330 2 8 5 6 00
Advertising Expense 510 9 1 0 00
Cash Short and Over 520 2 00
Insurance Expense 530 1 3 0 00
24
170 • Working Papers
8-1 ON YOUR OWN (continued)
GENERAL LEDGER
ACCOUNT Cash ACCOUNT NO. 110
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
20–
Dec. 31 Balance ✔13 6 0 0 00
ACCOUNT Accounts Receivable—Eat Right Eatery ACCOUNT NO. 130
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
20–
Dec. 31 Balance ✔2 9 9 6 00
ACCOUNT Prepaid Insurance ACCOUNT NO. 150
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
20–
Dec. 31 Balance ✔5 2 0 00
TE
Chapter 8 Recording Closing Entries and Preparing a Post-Closing Trial Balance for a Service Business • 171
ACCOUNT Sawyer Parker, Capital ACCOUNT NO. 310
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
20–
Dec. 31 Balance ✔14 8 8 6 00
Name Date Class
8-1 ON YOUR OWN (continued)
ACCOUNT Income Summary ACCOUNT NO. 330
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
ACCOUNT Advertising Expense ACCOUNT NO. 510
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
20–
Dec. 31 Balance ✔9 1 0 00
31 G24 5 4 2 4 00 20 3 1 0 00
31 G24 3 4 0 0 00 16 9 1 0 00
20–
Dec. 31 G24 8 2 8 0 00 8 2 8 0 00
31 G24 2 8 5 6 00 5 4 2 4 00
31 G24 5 4 2 4 00
31 G24 9 1 0 00
172 • Working Papers
8-1 ON YOUR OWN (concluded)
ACCOUNT Insurance Expense ACCOUNT NO. 530
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
20–
Dec. 31 Balance ✔1 3 0 00
ACCOUNT Supplies Expense ACCOUNT NO. 550
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
20–
Dec. 31 Balance ✔2 3 6 00
TE
31 G24 1 3 0 00
31 G24 2 3 6 00
Chapter 8 Recording Closing Entries and Preparing a Post-Closing Trial Balance for a Service Business • 173
Name Date Class
8-2 WORK TOGETHER, p. 230
Preparing a post-closing trial balance
ACCOUNT TITLE DEBIT CREDIT
Fix It Now
Post-Closing Trial Balance
April 30, 20–
Cash 4 9 0 0 00
Petty Cash 7 5 00
Accounts Receivable—B. Widell 1 3 8 7 00
174 • Working Papers
8-2 ON YOUR OWN, p. 230
Preparing a post-closing trial balance
ACCOUNT TITLE DEBIT CREDIT
TE
Repair World
Post-Closing Trial Balance
December 31, 20–
Cash 13 6 0 0 00
Petty Cash 1 5 0 00
Accounts Receivable—Eat Right Eatery 2 9 9 6 00
Supplies 2 4 0 00
Chapter 8 Recording Closing Entries and Preparing a Post-Closing Trial Balance for a Service Business • 175
Name Date Class
8-1 APPLICATION PROBLEM, p. 233
Journalizing and posting closing entries (LO1)
GENERAL JOURNAL PAGE
DATE ACCOUNT TITLE DOC.
NO.
POST.
REF.
GENERAL
DEBIT CREDIT
6 6
7 7
8 8
9 9
10 10
11 11
12 12
20 20
21 21
22 22
23 23
24 24
25 25
26 26
27 27
28 28
Closing Entries
30 Sales 410 1 7 0 4 00
Income Summary 330 1 7 0 4 00
30 Income Summary 330 1 1 3 2 00
Advertising Expense 510 2 5 5 00
Cash Short and Over 520 2 00
12
176 • Working Papers
8-1 APPLICATION PROBLEM (continued)
GENERAL LEDGER
ACCOUNT Cash ACCOUNT NO. 110
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
20–
June 30 Balance ✔8 7 1 5 00
ACCOUNT Accounts Receivable—Raymond O’Neil ACCOUNT NO. 130
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
20–
June 30 Balance ✔6 4 2 00
ACCOUNT Prepaid Insurance ACCOUNT NO. 150
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
20–
June 30 Balance ✔5 4 0 00
TE
Chapter 8 Recording Closing Entries and Preparing a Post-Closing Trial Balance for a Service Business • 177
8-1 APPLICATION PROBLEM (continued)
ACCOUNT Accounts Payable—Western Supplies ACCOUNT NO. 210
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
20–
June 30 Balance ✔2 6 8 00
ACCOUNT Akbar Sharma, Drawing ACCOUNT NO. 320
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
20–
June 30 Balance ✔3 7 5 00
ACCOUNT Sales ACCOUNT NO. 410
DATE ITEM POST.
REF. DEBIT CREDIT
BALANCE
DEBIT CREDIT
20–
June 30 Balance ✔1 7 0 4 00
30 G12 3 7 5 00
30 G12 1 7 0 4 00