11.The Income Summary account is a permanent account that will be carried forward period after period.
12.Closing entries are necessary so that owner’s capital will begin each period with a zero balance.
13.Permanent accounts carry their balances into the next accounting period.
14.If a company plans to continue business into the future, closing entries are not required.
15.The first step in the accounting cycle is to analyze transactions and events to prepare for journalizing.
16.The accounting cycle refers to the sequence of steps used in preparing the work sheet.
17.The first five steps in the accounting cycle include analyzing transactions, journalizing, posting, preparing an unadjusted trial balance, and recording adjusting entries.
18.The last four steps in the accounting cycle include preparing the adjusted trial balance, preparing financial statements, and recording closing and adjusting entries.
19.A classified balance sheet organizes assets and liabilities into important subgroups that provide more information to decision makers.
20.An unclassified balance sheet provides more information to users than a classified balance sheet.
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