SEL True or False 1. 2 3. closing entries can be prepared by referring solely to the Income Statement columns of the worksheet. After the adjusting and closing entries have been recorded and posted, the general ledger accounts that appear on the balance sheet have no balances. General ledger account balances agree with those in the financial statements even before adjusting and closing entries are recorded and posted. The income summary account is used to close the income and expense accounts. The balance of the owner's capital account represents the cumulative net result of income, expense and withdrawal transactions. 6. Closing entries deal primarily with the balances of real accounts. The only accounts that are closed are income statement accounts. Closing entries result in the transfer of profit or loss into the owner's Capital 4. account. 9. After all closing entries have been entered and posted, the balance of the Income Summary account will be zero. 10. Depreciation Expense-Building is a permanent account. 11. An expense account is closed with a debit to the expense account and a credit to Income Summary. 12. Income Summary is closed with a debit to Income Summary and a credit to the owner's Withdrawals account. 13. When profit or loss is exactly zero, one of the usual closing entries will be avoided. 14. The Income Summary account appears in the income statement. 15. Temporary accounts are also known as real accounts. 16. There is sufficient information on a post-closing trial balance to prepare an income statement. 17. The post-closing trial balance will contain only real accounts. 18. The Income Summary account will appear on the post-closing trial balance. 19. The post-closing trial balance contains asset, liability, withdrawal and capital accounts. 20. The final trial balance is called a post-closing trial balance. 21. A reversing entry is a journal entry which is the exact opposite of a related adjusting entry made at the end of the period. 22. To simplify the recording of regular transactions in the next accounting period, all adjusting journal entries are reversed. 23. Post-closing trial balance tests the equality of the accounts after the adjustments and the closing entries are posted