WGU D102 FINANCIAL ACCOUNTING OA
REVIEW MODULE 7 TEST
real accounts - ANSWER Reported on the balance sheet: Assets, Liabilities,
and Owners' Equity (Paid-in Capital and Retained Earnings). Permanent
Accounts
nominal accounts - ANSWER Temporary subaccounts of Retained Earnings
that are maintained throughout the year and then closed to Retained Earnings at
the conclusion of a particular year. These accounts are Revenues, Expenses, and
Dividends.
Real Accounts - ANSWER Those accounts which are not closed to zero
balance at the end of each accounting period; permanent accounts which appear
on the balance sheet;
Nominal Accounts - ANSWER Those accounts which are closed to zero
balance at the end of each accounting period; temporary accounts which
typically appear on the income statement;
Revenues
Expense
Dividends - ANSWER What are the 3 temporary accounts
Transfer amounts to permanent home (Retained Earnings)
Set balances to 0 (zero) for a new year - ANSWER At the end of the year two
things need to happen with the nominal accounts:
closing entries - ANSWER Also, the _______ transfer the net income or loss of
the accounting period to Retained Earnings and reduce Retained Earnings for
dividends.
net income or net loss - ANSWER Total revenues minus total expenses is the
____________ of the entity.
, Retained Earnings - ANSWER Net income is credited to _____________ in a
corporation because income increases owners' equity. A net loss would be
debited to Retained Earnings because a loss decreases owners' equity.
closing entries - ANSWER Entries that clear all nominal (temporary) accounts
to zero at the close of each accounting period, transferring their preclosing
balance to a permanent balance sheet account
Dividends - ANSWER ____________are not expenses and won't show up on
an income statement; they are distributions made to stockholders by a part of a
corporation's profit. Hence, dividends reduce retained earnings.
post-closing trial balance - ANSWER A roll call of all real account balances
once closing has been finished; checks if total debits equal total credits for all
real accounts before starting a new accounting cycle
Debit Sales Revenue $1,000
Credit Retained Earnings $1,000
This eliminates the Revenue and adds to Retained Earnings - ANSWER At the
end of the year, Sales Revenue carries a balance of $1,000. Make the entry
required.
Debit Retained Earnings $600
Credit Cost of goods sold $600
This gets rid of COGS Expense and decreases Retained Earnings - ANSWER
Cost of goods sold in the ending balance for the year is $600. Make the required
closing entry.
Debit Retained Earnings $150
Credit rent expense $150
REVIEW MODULE 7 TEST
real accounts - ANSWER Reported on the balance sheet: Assets, Liabilities,
and Owners' Equity (Paid-in Capital and Retained Earnings). Permanent
Accounts
nominal accounts - ANSWER Temporary subaccounts of Retained Earnings
that are maintained throughout the year and then closed to Retained Earnings at
the conclusion of a particular year. These accounts are Revenues, Expenses, and
Dividends.
Real Accounts - ANSWER Those accounts which are not closed to zero
balance at the end of each accounting period; permanent accounts which appear
on the balance sheet;
Nominal Accounts - ANSWER Those accounts which are closed to zero
balance at the end of each accounting period; temporary accounts which
typically appear on the income statement;
Revenues
Expense
Dividends - ANSWER What are the 3 temporary accounts
Transfer amounts to permanent home (Retained Earnings)
Set balances to 0 (zero) for a new year - ANSWER At the end of the year two
things need to happen with the nominal accounts:
closing entries - ANSWER Also, the _______ transfer the net income or loss of
the accounting period to Retained Earnings and reduce Retained Earnings for
dividends.
net income or net loss - ANSWER Total revenues minus total expenses is the
____________ of the entity.
, Retained Earnings - ANSWER Net income is credited to _____________ in a
corporation because income increases owners' equity. A net loss would be
debited to Retained Earnings because a loss decreases owners' equity.
closing entries - ANSWER Entries that clear all nominal (temporary) accounts
to zero at the close of each accounting period, transferring their preclosing
balance to a permanent balance sheet account
Dividends - ANSWER ____________are not expenses and won't show up on
an income statement; they are distributions made to stockholders by a part of a
corporation's profit. Hence, dividends reduce retained earnings.
post-closing trial balance - ANSWER A roll call of all real account balances
once closing has been finished; checks if total debits equal total credits for all
real accounts before starting a new accounting cycle
Debit Sales Revenue $1,000
Credit Retained Earnings $1,000
This eliminates the Revenue and adds to Retained Earnings - ANSWER At the
end of the year, Sales Revenue carries a balance of $1,000. Make the entry
required.
Debit Retained Earnings $600
Credit Cost of goods sold $600
This gets rid of COGS Expense and decreases Retained Earnings - ANSWER
Cost of goods sold in the ending balance for the year is $600. Make the required
closing entry.
Debit Retained Earnings $150
Credit rent expense $150
