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.

Buster’s Meat Market bought $4,000 worth of merchandise from Chainey Brothers Suppliers and signed a 90-day, 6% promissory note for the $4,000. Chainey Brothers Supplier’s journal entry to record the sales transaction is:

On January 1, Year 1, Judge, Inc. borrowed $100,000 on a 10-year, 7% installment note payable. The terms of the note require Judge, Inc. to pay 10 equal payments of $14,238 each December 31 for 10 years. The required general journal entry to record the payment on the note on December 31, Year 2 is:

On December 1, Victoria Company signed a 90-day, 6% note payable, with a face value of $15,000. What amount of interest expense is accrued at December 31 on the note? (Use 360 days a year.)

Investing activities include receiving cash dividends from investments in other companies’ stocks.

Fernando Company’s Merchandise Inventory account at year-end has a balance of $62,115, but a physical count reveals that only $61,900 of inventory exists. The adjusting entry to record this $215 of inventory shrinkage is:

The Dividends account is normally closed by debiting it.

Accrued expenses at the end of one accounting period are expected to result in cash payments in a future period.

The recurring steps performed each reporting period in preparing financial statements, starting with analyzing and recording transactions in the journal and continuing through the post-closing trial balance, is referred to as the:

An unadjusted trial balance is a list of accounts and balances prepared before adjustments are recorded.