Chapter 6 accounting,2023 with verified questions and answers

The income statement includes all changes in owner's equity except those resulting from investments or withdrawals of assets by the owner. True To close the income summary account with a credit balance, debit the account for its balance and credit the drawing account. False To close an expense account with a debit balance, debit the account for its balance and credit the income summary account. False The steps involved in handling all of the transactions and events completed during an accounting period, beginning with placing data in a book of original entry and ending with a post-closing trial balance, are referred to collectively as the accounting cycle. True Long-term liabilities are liabilities that are due in a period longer than one year. True The income summary account is an account used only during the closing process. True The income summary account appears on the income statement at the end of the accounting period. False A form of balance sheet that lists the assets at the left and the liabilities and owner's equity at the right is called a report form of balance sheet. False A statement of owner's equity is a statement summarizing all of the changes in owner's equity during a specified period of time. True Expenses on the income statement could be listed in alphabetical order by dollar amount. False Adjustments at the end of the period are not formally entered in the journal or posted to the accounts. False Property, plant, and equipment are assets that are expected to serve the business for many years. True The Account Title and Balance Sheet columns of the work sheet provide all of the information necessary to prepare the statement of owner's equity. False To close a revenue account with a credit balance, debit the account for its balance and credit the income summary account. True A separate explanation of each closing entry is necessary. False The statement of owner's equity is prepared from information from the asset and liability accounts. False An income statement is an itemized statement that provides information regarding the status of the assets, liabilities, and owner's equity of a business enterprise as of a specified date. False The purpose and use of the income summary account is to summarize the difference between revenues and expenses. True Long-term liabilities may also be called long-term debt. True A mortgage on an office building is an example of a property, plant, and equipment asset. False