101) The adjusting entry for unearned revenue always involves an asset account and a revenue account.
102) Prepaid expense accounts should appear on the balance sheet.
103) The statement of retained earnings is the first financial statement to be prepared, followed by the balance sheet, and then the income statement.
104) Retained earnings for the beginning of a period appears on the statement of retained earnings while the ending balance of retained earnings appears on the balance sheet.
105) Salaries expense a permanent account, so it is not closed as the end of the period.
106) To close the revenue account a credit is required to retained earnings.
107) Most balance sheet accounts must be closed at the end of the accounting period after preparation of the financial statements.
108) If the balance in Retained Earnings on January 1, 2010 was zero, then a credit balance in Retained Earnings on December 31, 2010 (after closing revenue and expense accounts) represents net income for the accounting period.
109) "Closing the books" adjusts the balances of asset and liability accounts back to zero for the next accounting period.
110) The closing entry required to reset the dividends account for the next accounting period includes a debit to dividends and a credit to retained earnings.