Accounting
Cycle
Normal
Balance
Closing
Entries
Journal
Entries
Keyterms
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What is the first
step of the
accounting cycle?
Collect source documents.
What must be done before
posting to the general
ledger?
Journalize.
Where does the info in the
worksheet come from?
General ledger.
What is the last step of the
accounting cycle?
Posting closing trial balance.
When do you prepare the
Trial balance?
End of the month.
What is the normal
balance of assets?
Debit.
What is the normal
balance of expenses?
Debit.
What is the normal
balance of accounts
receivable?
Debit.
What is the normal
balance for prepaid
insurance?
Debit.
What is the normal
balance of income
summary?
Income summary doesn’t have normal balance.
Which accounts do you
close?
Sales, expenses, drawing, income summary
How would you close sales
$365.
Debit sales 365, credit income summary 365
How would you close
income summary $400.
Debit income summary 400, credit capital 400
How would you close
drawing $300.
Debit capital 300 credit drawing 300.
How would you close
supplies $300.
You wouldn’t close supplies.
What is the journal entry
for: paid cash for supplies
$500.
Credit cash 500, debit supplies 500
What is the journal entry
for: Sold services on
account $450.
Debit accounts receivable 450, credit sales 450.
What is the journal entry
for: bought supplies on
account $2000.
Debit supplies 2000, credit accounts payable
2000.
What is the journal entry
for: paid cash on account
$3000.
Debit accounts payable 3000, credit cash 3000
What is the journal entry
for: received cash from
owner as an investment
$5000.
Debit cash 5000, credit capital 5000.
What is an Account?
A record that summarizes all info about one item in the
accounting equation
What are Temporary
Accounts?
Sales, expenses. Drawing, income summary.
What are Permanent
accounts.
Cash, supplies, (all assets and liabilities)
What is the purpose of a
worksheet.
To prove that debits and credits equal
What is Net loss?
The difference between total revenue and total
expenses when total expenses are greater.