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Homework answers / question archive / 8
8. The purpose of accrual accounting is to measure the amounts of cash received and paid during the period. * (1 Puan) True False
9.
Closing entries by income summary.
Debit Revenue, Debit Expense.
Credit Revenue, Credit Expense, Credit Dividends.
Debit Revenue, Credit Expense.
Debit Revenue, Credit Expense, Credit Dividends.
8.
Answer : False..
>> Accrual concept means record transaction of cash received and receivable, cash paid and payable.
>> So in Accrual Accounting we cannot measure cash paid and cash received.
9.
In Income Summary, Closing entries are done through by debiting the revenue accounts and Crediting the expense account. Thus, all the revenue and expense are closed through following entries:
1. Renenue Account Debit
Income Summary Credit
2. Income Summary Debit
Expense Account Credit
Hence, answer is "Debit Revenue, Credit Expense"
Note : Entries of Dividend account does not affect Income Summary. It affects Retained earnings account.
