61.On a work sheet, if the Debit total exceeds the Credit total of the Income Statement columns, a net loss is indicated.
62.If all columns of a completed work sheet balance, you can be sure that no errors were made in its preparation.
63.Normally closing entries are first entered in the general journal and then posted to the work sheet.
64.Adjusting entries are usually entered in the work sheet before they are entered in the general journal.
65.On the work sheet, net income is entered in the Income Statement Credit column as well as the Balance Sheet Credit column.
66.An expense account is normally closed by debiting Income Summary and crediting the expense account.
67.After posting the entries to close all revenue and expense accounts, the Income Summary account of Cleaver Auto Services has a $4,000 debit balance. This result implies that Cleaver earned a net income of $4,000.
68.When there is a net loss the Income Summary account would have a credit balance.
69.The steps in the closing process are (1) close credit balances in revenue accounts to Income Summary; (2) close debit balances in expense accounts to Income Summary; (3) close Income Summary to Retained Earnings; (4) close Dividends to Retained Earnings.
70.A post-closing trial balance is a list of permanent accounts and their balances from the ledger after all closing entries are journalized and posted.
71.The aim of a post-closing trial balance is to verify that (1) total debits equal total credits for temporary accounts, and (2) all temporary accounts have zero balances.
72.Reversing entries are optional.