LET’S CHECK

Activity 23. You have now completed the nine steps of the accounting cycle. Let check
your understanding on the last 3 step of the accounting process by answering the
questions below. On the space provided identify the term being described or determine
the correct procedure done in closing entries.
1. Closing Entry procedure done at the end of the period to close temporary
accounts.
2. In closing revenue, we simply Debit revenue accounts and Credit income summary.
3. In closing withdrawals account, it is place on Credit Drawing and Debit capital
account.
4. In closing expenses account the entry is Credit the individual expenses and Debit
income summary.
5. When income summary resulted to a credit balance this means that Revenue is
greater than Income Summary.
6. A trial balance comprise of permanent accounts is called Real Accounts.
7. If revenue is less than the expenses, then income summary will result to a Credit
balance.
8. What account that absorbs the movement of revenue, expenses and
withdrawal in a closing entry? Nominal Accounts.
9. The balance of the Income Summary after closing the Revenue and Expenses is
a credit balance, this means the performance of the entity is a Net profit.
10. If the entity incurred a net loss, the Income Summary account will be closed by a
Credit balance and capital will be placed on the Debit.