Select one: a. a. Interest Expense Sales Revenue Cost of Goods Sold all of the above will be closed to Retained Earnings On April 1, 2007, a two-year insurance policy was purchased and the total premium of $5,280 was paid. Accounts Payable c. Accounts Receivable d. Common Stock 2. asked Jun 12 in Business by Insanity. To do this, their balances are emptied into the income summary account. Closing entries are made A)to clear revenue and expense accounts of their balances. The following list includes selected permanent accounts and all of the temporary accounts from the December 31, 2017, unadjusted trial balance of Emiko Co., a business owned by Kumi Emiko. All Revenues are temporary accounts. Instead, the permanent asset, liability, and equity accounts maintain balances year over year to trace the financial history of the company. Which of the following is not a temporary account? Income Summary. These accounts are not zeroed out with closing entries at the end of the year like temporary accounts on the income statement. The balances of the nominal account is not carried forward to the next financial or the accounting period ad they are temporary account and their balances are transferred to real account. Hence this option is incorrect. Definition of Temporary Account A temporary account is a general ledger account that begins each accounting year with a zero balance. How to solve: Which of the following accounts is a temporary account? Closing entries are used to transfer the contents of the temporary accounts into the permanent account, Retained Earnings, which resets the temporary balances to zero, enabling tracking of revenues, expenses, and dividends in the next period. What is a Nominal Account? Permanent accounts do not close at the end of each month. Rent Expense C. Accounts Payable D. Inventory. (The owner's drawing account is a temporary account because its balance is closed to the owner's capital account at the end of each year in order to begin the next year with a $0 balance.) Also indicate the al statement in which each account will appear. AN. answered Jun 12 by Insanity . (Points : 10) Sales Supplies Accounts Payable Accounts Receivable D. This account is not a temporary account. A nominal account is an account in which accounting transactions are stored for one fiscal year.At the end of the fiscal year, the balances in these accounts are transferred into permanent accounts.Doing so resets the balances in the nominal accounts to zero, and prepares them to accept a new set of transactions in the next fiscal year. A. Q 69. Service Revenue d. Prepaid Insurance 2.The balance in the Merchandise Inventory account at December 31, 2013 is: a. Correct answers: 1 question: Which one of the following is not an accurate description of the allowance for doubtful accounts? D)All of these choices. Hence this option is incorrect. C)to summarize a period's revenues and expenses. Which of the following would be included in the adjusting entry to accrue interest expense? Unlike previous trial balances, the retained earnings figure is included, which was obtained through the closing process. LO 5.1 Which of the following accounts is considered a temporary or nominal account? Generally, the balance sheet accounts are permanent accounts, except for the owner's drawing account which is a balance sheet account and a temporary account. Reduce the number of items that get reported in the general purpose financial statements. Hence this option is incorrect. A temporary account is an account that closes at the end of each accounting period. B)to clear withdrawals of its balance. a. Cash b. Prepaid Rent c. Accumulated Depreciation (contra-asset) d. Advertising Expense Certain Accounts are closed at the end of an accounting period in order to: a. accounting-and-taxation; 0 Answer. (Points : 10) Sales Supplies Accounts Payable Accounts Receivable During the closing stage, all income and expense balances are transferred to the income and expense summary account and eventually to the retained earnings. A credit to Interest expense c. A debit to prepaid interest d. None of the above Permanent Accounts This account is not a temporary account. multiple choice : the account is a temporary account. 1 . Every year they are zeroed out and closed. 1.Which of the following accounts is a permanent account (an account that is not closed)? sales interest expense accumulated depreciation cost of goods sold Which of the following accounts will be closed to Retained Earnings? Which of the following accounts is a nominal (temporary) account? Best answer. Temporary Accounts 'Temporary Accounts' Definition: Temporary accounts refer to accounts that are closed at the end of every accounting period. They are closed to prevent their balances from being mixed with those of the next period. Note that this happens because at the end of every accounting period you should transfer the balance to a temporary account into another account (closing account). which of the following entries will be necessary to close the insurance expense account at the end of the year: debit insurance expense & credit income summary : which of the following account groups are all considered temporary accounts : drawing account fees earned, rent expense : on which financial statement will income summary be shown Which of the following is NOT a temporary account? Which of the following accounts is considered a temporary or nominal account? Permanent accounts are the exact opposite of temporary accounts which are closed at a period-end. At this point, the accounting cycle is complete, and the company can begin a new cycle in the next period. the account is increased by an estimate of uncollectible accounts expense. Fees Earned Revenue Prepaid Advertising Unearned Service Temporary accounts. Which of the following is a temporary account? Sales Revenue b. a. the account is a contra account. For example, all revenue, cost of goods sold and expense accounts close to retained earnings, a permanent account. All temporary accounts with zero balances were left out of this statement. Which of the following is not a temporary account? d. $11,150. A. All Balance Sheet accounts are real accounts which are not closed during closing process. Then at the end of the year its account balance is removed by transferring the amount to another account. Which of the following accounts is a temporary account? Answer: B. the amount of the allowance for doubtful accounts decreases the net realizable value of a company's receivables Temporary (nominal) accounts are accounts that are closed at the end of each accounting period, and include income statement, dividends, and income summary accounts. ... Q 68. etc So according to the given situation, the bad debt expense is a nominal account as it is an expense and record in the debit side of the income statement. 3 . Temporary accounts. $300. Accounts Receivable B. A temporary account refers to a general ledger account that starts each accounting period with a zero balance. Thus, in temporary accounts, balances are not carried over from one accounting period to the next. Example. Which of the following is a temporary account? Explanation for incorrect answers: B. Definition: Temporary accounts or nominal accounts are closed at the end of every year. They don’t perpetually have a balance. Answer to Which of the following accounts is a temporary account? A credit to Interest payable b. A)Depreciation Expense-Vehicles B)Service Revenue C)Unearned Revenue D)Interest Income. Rental Revenue C. Common - Answered by a verified Financial Professional Fees Earned Revenue B. Prepaid Advertising C. Unearned Service Revenue D. Prep… a. 8. Revenue b. 3. All temporary accounts must be reset to zero at the end of the accounting period. 4. Which of the following accounts is not a temporary account? The income summary account then transfers the net balance of all the temporary accounts to retained earnings, which is a permanent account on the balance sheet. These accounts include revenue, expense, and withdrawal accounts. Take the retained earnings account … This is done through closing entries. Hence the correct option is A. All income statement accounts are primarily temporary accounts. This means the account balances are zeroed out and the moved to the retained earnings account. Use these account balances along with the additional information to … Which of the following account is not a temporary account while closing all temporary accounts In the closing process at the end of a financial year? EXERCISE 5-1 (temporary) and indic ISE 5-1 Classify the following accounts as real (permanent) or nominal rary) and indicate with an X whether the account is closed. That is why these accounts are called temporary accounts. The new account, Income Summary, will be discussed shortly. Temporary accounts, as you might have guessed, have a limited lifespan – typically a year. Sales Returns and Allowances: Definition. Personal Account: This account records the personal accounts like debtors account, creditors account. 0 votes. Insurance expense c. Cash d. Income Summary Nominal accounts are referred as temporary account since, every accounting year a nominal account is prepared with the zero balance at initial stage and changes with transactions by the company. 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