76) The goal of closing is to clear all temporary accounts and update Capital.

 

77) The first entry to close accounts is to debit Revenue and credit Income Summary.

 

78) In the first space below, indicate whether each account is a real or nominal account using (R) Real Account and (N) Nominal Account. In the second space below, indicate by an (X) if the account should be closed.

 

  N    X   0. Advertising Expense

________________ 1. Prepaid Insurance

________________ 2. Service Fees

________________ 3. Depreciation Expense

________________ 4. Accumulated Depreciation

________________ 5. Salaries Payable

________________ 6. Prepaid Rent

________________ 7. Income Summary

________________ 8. Insurance Expense

79) In the first space below, indicate whether each account is a real or nominal account using (R) Real Account and (N) Nominal Account. In the second space below, indicate by an (X) if the account should be closed.

 

  N     X   0. Advertising Expense

________________ 1. Cash

________________ 2. Tennis Fees

________________ 3. Accounts Receivable

________________ 4. Accumulated Depreciation

________________ 5. Withdrawals

________________ 6. Prepaid Rent

________________ 7. Income Summary

________________ 8. Utilities Expense

80) From the following items in the income statement columns of the worksheet of Friend’s Tutoring at December 31, prepare the closing entries without explanation, assuming that a $1,000 withdrawal was made during the period.

 

Income Statement

AccountDebitCredit

Tutoring Fees3,450

Wages Expense700

Rent Expense600

Supplies Expense450

Insurance Expense250_____

2,0003,450

Net Income1,450_____

$3,450$3,450

 

 



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