1. True and False Question 1. Accumulated depreciation is a contra asset account. 2. Unearned revenue is reported as a current liability. 3. Closing entries affect temporary accounts are revenues, expenses, withdrawal, and income summary. 4. Accounts that appear in the balance sheet are often called temporary accounts. 5. The closing process takes place before financial statements have been prepared. 6. Revenue and expense accounts should not be closed at the end of the accounting period. 7. Income Summary is a temporary account only used for the closing process. 8. Revenue accounts are temporary accounts that should begin each accounting period with zero balances. 9. Closing revenue and expense accounts at the end of the accounting period. 10. Closing entries result in the owner's capital account being transferred into net income or net loss for the period ending 11. Closing entries are required close all ledger accounts. 12. The Income Summary account is a permanent account that will be carried forward period after period. 13. Closing entries are necessary so that owner's capital will begin each period with a zero balance. 14. The closing process is a step in the accounting cycle. 15. Permanent accounts carry their balances into the next accounting period. 16. The first step in the accounting cycle is to analyze transactions and events to prepare for journalizing. 17. The first five steps in the accounting cycle include analyzing transactions, journalizing, posting, preparing an unadjusted trial balance, and recording adjusting entries. 18. If a company plans to continue business into the future, closing entries are not required. 19. The accounting cycle refers to the sequence of steps used in preparing the work sheet. 20. The last four steps in the accounting cycle include preparing the adjusted trial balance, preparing financial statements, and recording closing and adjusting entries. 21. Current assets and current liabilities are expected to be used up the company's operating cycle. 22. Intangible assets are long-term resources that benefit business operations. 23. Assets are often classified into current assets, long-term investments, plant assets, and intangible assets. 24. Current liabilities are cash and other resources that are expected to be sold, or used within one year