Accounts that Close

Question 1

Revenue

Answer 1

Revenue $$$

Income Summary $$$

Question 2

Expense

Answer 2

Income Summary $$$

Expense $$$

Question 3

Sequence of the Closing Process

Answer 3

1. Close Revenue to Income Summary
   (Debit Revenue, Credit Income Summary)
2. Close Expenses to Income Summary
   (Debit Income Summary, Credit Expenses)
3. Close Income Summary to Capital
   (Net income: Debit Income Summary, Credit Capital)
4. Close Draw to Capital
   ( Debit Capital, Credit Draw )

Question 4

Debit Ratio

Answer 4

Total Liabilities / Total Assets

Question 5

Current Ratio

Answer 5

Current Assets / Current Liabilities