| A | B |
|---|
| Before closing entries are journalized and posted, the Income Summary account in the general ledger has a normal credit balance. | False |
| Closing entries transfer the net income or net loss to the withdrawals account. | false |
| The Income Summary account is a simple income statement in the ledger. | true |
| The Income Summary account is located in the owner's equity section of the general ledger. | true |
| The last step in the accounting cycle is the preparation of the post-closing trial balance. | true |
| Revenue and expense accounts must be closed out because their balances apply to only one accounting period. | true |
| When expense accounts are closed, the Income Summary account is credited. | false |
| Closing the revenue account is the second closing entry. | false |
| If a business reports a net loss for the period, the journal entry to close the Income Summary account would be a debit to capital and a credit to Income Summary. | true |
| To close a revenue account, debit it for the amount of its credit balance. | true |
| After the closing entries have been posted, the balance in the capital account reflects the net income or net loss and the withdrawals for the period. | true |
| To close the withdrawals account, the amount of its balance is debited to the capital account and credited to the withdrawals account. | true |
