ACC 221 FINAL EXAM TEST PAPER 2026 FULL
SOLUTION VERIFIED
◉ Debit entries in Expense Accounts and Credit entries in Revenue
Accounts. Empty the ending balances of the Expense and Revenue
accounts into Retained Earnings and always start each new month
with zero balance.. Answer: Recording Transactions in Revenue and
Expense Accounts
◉ Revenue Account. Normal Credit balance. Increases Cash Account.
Answer: Sales Revenue Account
◉ Expense Account. Normal Debit balance. Decreases Cash Account.
Answer: Cost of Goods Sold
◉ Dr-Accounts Receivable, Cr-Sales Revenue. Answer: Recording a
Sale in a Merchandising Company (Journal Entry)
◉ Rent, Wage, Interest, Operating, Supplies, Depreciation, Cost of
Goods Sold etc.. Answer: Types of Expense Accounts
◉ Normal Debit balance. Decreases Cash Account. A Debit to an
Expense Account increases Expense Account and Decreases
Retained Earnings. Answer: Expense Account
,◉ Describes what caused the change in Retained Earnings. Answer:
Income Statement
◉ All ending balances in Revenue and Expense Accounts are used.
States Gross Profit and Net Income. Answer: Preparing an Income
Statement
◉ Sales Revenue - Cost of Goods Sold. Answer: Gross Profit Equation
◉ Gross Profit - Total Expenses. Answer: Net Income Equation
◉ Balance Sheet-Snapshot of a company for one point in time.
Income Statement-Summary of a company's profits/losses for an
accounting period. Answer: Balance Sheet vs. Income Statement
◉ Retained Earnings Beginning Balance + Net Income - Dividends
Paid. Answer: Calculation Retained Earnings Ending Balance
◉ Sum of all Revenue Accounts - Sum of all Expense Accounts.
Answer: Net Income Formula
◉ 1) General Ledger-Determine the ending DEBIT balances for all
the expense accounts 2) General Journal-Credit the ending balance
, of each Expense Account and Debit Retained Earnings for the same
amount 3) Post it to the General Ledger accounts. Answer: 3 Steps
for Closing Expense Accounts
◉ 1) General Ledger-Determine the ending CREDIT balance of the
sales revenue account 2) General Journal-Debit Sales Revenue with
the ending balance of the Sales Revenue account and Credit Retained
Earnings for the same amount 3) Post it to the General Ledger
accounts. Answer: 3 Steps for Closing Revenue Accounts
◉ Dr-Sales Revenue (w/ ending CREDIT balance of the Sales
Revenue Account in the GL), Cr-Retained Earnings (w/ same
amount). Answer: Close Revenue Account (Journal Entry)
◉ DR-Retained Earnings (w/ ending DEBIT balance of the Supplies
Expense Account in the GL) CR-Supplies Expense (w/ same amount).
Answer: Close Expense Account (Journal Entry) Ex-Supplies Expense
◉ Shows all of the General Ledger account balances after the closing
entries have been made. Used to determine that everything is in
balance and ready to start a new Accounting Cycle. Answer: Post-
Closing Trial Balance
◉ 1) Determine the effects of each business transaction on AC 2)
Make GJ entry and post to the GL 3) Enter any required adjusting
entries into the GJ and post to the GL 4) Prepare a Pre-Closing Trial
SOLUTION VERIFIED
◉ Debit entries in Expense Accounts and Credit entries in Revenue
Accounts. Empty the ending balances of the Expense and Revenue
accounts into Retained Earnings and always start each new month
with zero balance.. Answer: Recording Transactions in Revenue and
Expense Accounts
◉ Revenue Account. Normal Credit balance. Increases Cash Account.
Answer: Sales Revenue Account
◉ Expense Account. Normal Debit balance. Decreases Cash Account.
Answer: Cost of Goods Sold
◉ Dr-Accounts Receivable, Cr-Sales Revenue. Answer: Recording a
Sale in a Merchandising Company (Journal Entry)
◉ Rent, Wage, Interest, Operating, Supplies, Depreciation, Cost of
Goods Sold etc.. Answer: Types of Expense Accounts
◉ Normal Debit balance. Decreases Cash Account. A Debit to an
Expense Account increases Expense Account and Decreases
Retained Earnings. Answer: Expense Account
,◉ Describes what caused the change in Retained Earnings. Answer:
Income Statement
◉ All ending balances in Revenue and Expense Accounts are used.
States Gross Profit and Net Income. Answer: Preparing an Income
Statement
◉ Sales Revenue - Cost of Goods Sold. Answer: Gross Profit Equation
◉ Gross Profit - Total Expenses. Answer: Net Income Equation
◉ Balance Sheet-Snapshot of a company for one point in time.
Income Statement-Summary of a company's profits/losses for an
accounting period. Answer: Balance Sheet vs. Income Statement
◉ Retained Earnings Beginning Balance + Net Income - Dividends
Paid. Answer: Calculation Retained Earnings Ending Balance
◉ Sum of all Revenue Accounts - Sum of all Expense Accounts.
Answer: Net Income Formula
◉ 1) General Ledger-Determine the ending DEBIT balances for all
the expense accounts 2) General Journal-Credit the ending balance
, of each Expense Account and Debit Retained Earnings for the same
amount 3) Post it to the General Ledger accounts. Answer: 3 Steps
for Closing Expense Accounts
◉ 1) General Ledger-Determine the ending CREDIT balance of the
sales revenue account 2) General Journal-Debit Sales Revenue with
the ending balance of the Sales Revenue account and Credit Retained
Earnings for the same amount 3) Post it to the General Ledger
accounts. Answer: 3 Steps for Closing Revenue Accounts
◉ Dr-Sales Revenue (w/ ending CREDIT balance of the Sales
Revenue Account in the GL), Cr-Retained Earnings (w/ same
amount). Answer: Close Revenue Account (Journal Entry)
◉ DR-Retained Earnings (w/ ending DEBIT balance of the Supplies
Expense Account in the GL) CR-Supplies Expense (w/ same amount).
Answer: Close Expense Account (Journal Entry) Ex-Supplies Expense
◉ Shows all of the General Ledger account balances after the closing
entries have been made. Used to determine that everything is in
balance and ready to start a new Accounting Cycle. Answer: Post-
Closing Trial Balance
◉ 1) Determine the effects of each business transaction on AC 2)
Make GJ entry and post to the GL 3) Enter any required adjusting
entries into the GJ and post to the GL 4) Prepare a Pre-Closing Trial
