Question 1

Closing the accounts refers to:

Accepted Answer

A) establishing zero balances in the balance sheet accounts. 
B) establishing a zero balance in the cash at bank account. 
C) establishing zero balances in all ledger accounts. 
D) transferring income and expense account balances to the profit or loss summary account,which is then closed to the equity account. 
A) establishing zero balances in the balance sheet accounts. 
B) establishing a zero balance in the cash at bank account. 
C) establishing zero balances in all ledger accounts. 
D) transferring income and expense account balances to the profit or loss summary account,which is then closed to the equity account.

Question 2

What is the closing entry for drawings of $25 000?

Accepted Answer

A) Debit owner's capital account $25 000; credit drawings $25 000 
B) Debit profit or loss summary account $25 000; credit drawings $25 000 
C) Debit bank $25 000; credit drawings $25 000 
D) None of the above 
A) Debit owner's capital account $25 000; credit drawings $25 000 
B) Debit profit or loss summary account $25 000; credit drawings $25 000 
C) Debit bank $25 000; credit drawings $25 000 
D) None of the above

Question 3

At the end of the period a company often prepares which additional accounting report?

Accepted Answer

A) Statement of changes in equity 
B) Statement of retained profits 
C) Statement of equity 
D) Statement of liabilities 
A) Statement of changes in equity 
B) Statement of retained profits 
C) Statement of equity 
D) Statement of liabilities

Question 4

What type of account is retained profits?

Accepted Answer

A) Asset 
B) Liability 
C) Income 
D) Equity 
A) Asset 
B) Liability 
C) Income 
D) Equity

Question 5

On 1 January Make More Company Pty Ltd issued 10 000 shares for $3 each.Which of the following is the correct entry to record this transaction?

Accepted Answer

A) Debit bank $30 000; credit shareholder's equity $30 000 
B) Debit bank $10 000; credit share capital $10 000 
C) Debit bank $30 000; credit share capital $30 000 
D) Debit share capital $10 000; credit bank $10 000 
A) Debit bank $30 000; credit shareholder's equity $30 000 
B) Debit bank $10 000; credit share capital $10 000 
C) Debit bank $30 000; credit share capital $30 000 
D) Debit share capital $10 000; credit bank $10 000

Question 6

Which of the following statements relating to reversing entries is correct?

Accepted Answer

A) They reverse the effect of credit transactions. 
B) They reverse the effects of closing entries. 
C) They reverse the effect of errors. 
D) They reverse the effect of certain adjusting entries. 
A) They reverse the effect of credit transactions. 
B) They reverse the effects of closing entries. 
C) They reverse the effect of errors. 
D) They reverse the effect of certain adjusting entries.

Question 7

In a company balance sheet,what are the two main categories equity is separated into?

Accepted Answer

A) Share capital and retained profits 
B) Retained profits and dividends 
C) Share capital and dividends 
D) Retained profits and dividends payable 
A) Share capital and retained profits 
B) Retained profits and dividends 
C) Share capital and dividends 
D) Retained profits and dividends payable

Question 8

Income and expense accounts can be referred to as:

Accepted Answer

A) incurred accounts. 
B) temporary accounts. 
C) personal accounts. 
D) permanent accounts. 
A) incurred accounts. 
B) temporary accounts. 
C) personal accounts. 
D) permanent accounts.

Question 9

The major purpose of a post-closing trial balance is to:

Accepted Answer

A) confirm that the adjusting entries are correct. 
B) determine if any adjusting entries have been omitted. 
C) test for equality of debits and credits in the general ledger to ensure the opening position is correct for the next period. 
D) make sure that all post-closing account balances are equal to the pre-closing account balances. 
A) confirm that the adjusting entries are correct. 
B) determine if any adjusting entries have been omitted. 
C) test for equality of debits and credits in the general ledger to ensure the opening position is correct for the next period. 
D) make sure that all post-closing account balances are equal to the pre-closing account balances.

Question 10

Which of the following is the correct closing entry for sales income of $30 000?

Accepted Answer

A) Debit sales income $30 000; credit equity $30 000 
B) Debit profit or loss summary account $30 000; credit sales income $30 000 
C) Debit equity $30 000; credit sales income $30 000 
D) Debit sales income $30 000; credit profit or loss summary account $30 000 
A) Debit sales income $30 000; credit equity $30 000 
B) Debit profit or loss summary account $30 000; credit sales income $30 000 
C) Debit equity $30 000; credit sales income $30 000 
D) Debit sales income $30 000; credit profit or loss summary account $30 000

Question 11

The major purpose of a post-closing trial balance is to:

Accepted Answer

A) prepare the accounting reports. 
B) confirm that the ledger is in balance at the start of the new accounting period. 
C) determine if any closing entries have been missed. 
D) determine if any adjusting entries have been missed. 
A) prepare the accounting reports. 
B) confirm that the ledger is in balance at the start of the new accounting period. 
C) determine if any closing entries have been missed. 
D) determine if any adjusting entries have been missed.

Question 12

The post-closing trial balance contains only:

Accepted Answer

A) income statement accounts. 
B) asset and liability accounts. 
C) balance sheet accounts. 
D) temporary accounts. 
A) income statement accounts. 
B) asset and liability accounts. 
C) balance sheet accounts. 
D) temporary accounts.

Question 13

Which of the following statements relating to reversing entries is correct?

Accepted Answer

A) Reversing entries are always necessary. 
B) There are alternative ways of dealing with the effect of accruals in subsequent periods without using reversing entries. 
C) Reversing entries are never appropriate for deferral type entries. 
D) Depreciation is an adjustment that requires reversing in the subsequent period. 
A) Reversing entries are always necessary. 
B) There are alternative ways of dealing with the effect of accruals in subsequent periods without using reversing entries. 
C) Reversing entries are never appropriate for deferral type entries. 
D) Depreciation is an adjustment that requires reversing in the subsequent period.

Question 14

Interim statements are:

Accepted Answer

A) summary statements. 
B) prepared by junior staff when the accountant is busy. 
C) prepared between the annual reports,usually half-yearly,quarterly or monthly. 
D) used by creditors to deal with an emergency. 
A) summary statements. 
B) prepared by junior staff when the accountant is busy. 
C) prepared between the annual reports,usually half-yearly,quarterly or monthly. 
D) used by creditors to deal with an emergency.

Question 15

Which statement relating to the profit or loss summary account is incorrect?

Accepted Answer

A) The balance in each income and expense account is transferred to the profit or loss summary account. 
B) The profit or loss summary account is a permanent account. 
C) The profit or loss summary account is established to summarise the balances in the income and expense accounts. 
D) The balance in the profit or loss summary account is transferred to the owner's capital account. 
A) The balance in each income and expense account is transferred to the profit or loss summary account. 
B) The profit or loss summary account is a permanent account. 
C) The profit or loss summary account is established to summarise the balances in the income and expense accounts. 
D) The balance in the profit or loss summary account is transferred to the owner's capital account.

Question 16

In which order do these steps in the accounting cycle occur?
I Prepare closing entries
II Post to the ledger
III Enter business transactions in the journal
IV Prepare adjusting entries
V Prepare financial statements

Accepted Answer

A) I,II,III,IV,V 
B) III,IV,II,I,V 
C) IV,II,I,III,V 
D) III,II,IV,V,I 
A) I,II,III,IV,V 
B) III,IV,II,I,V 
C) IV,II,I,III,V 
D) III,II,IV,V,I

Question 17

What is the correct closing entry for the bank account?

Accepted Answer

A) No closing entry is required 
B) Debit owner's capital account; credit bank 
C) Debit bank; credit owner's capital account 
D) Debit profit or loss summary account; credit bank 
A) No closing entry is required 
B) Debit owner's capital account; credit bank 
C) Debit bank; credit owner's capital account 
D) Debit profit or loss summary account; credit bank

Question 18

In accounting for a partnership separate capital and drawings accounts are maintained for each:

Accepted Answer

A) shareholder. 
B) partnership. 
C) year. 
D) partner. 
A) shareholder. 
B) partnership. 
C) year. 
D) partner.

Question 19

A trial balance taken out after the closing process has been completed is called a:

Accepted Answer

A) final trial balance. 
B) adjusted trial balance. 
C) closing trial balance. 
D) post-closing trial balance. 
A) final trial balance. 
B) adjusted trial balance. 
C) closing trial balance. 
D) post-closing trial balance.

Question 20

Because income and expenses are accumulated for only one year they are known as:

Accepted Answer

A) temporary accounts. 
B) permanent accounts. 
C) short-term accounts. 
D) yearly accounts. 
A) temporary accounts. 
B) permanent accounts. 
C) short-term accounts. 
D) yearly accounts.

Closing the accounts refers to:

What is the closing entry for drawings of $25 000?

At the end of the period a company often prepares which additional accounting report?

What type of account is retained profits?

On 1 January Make More Company Pty Ltd issued 10 000 shares for $3 each.Which of the following is the correct entry to record this transaction?

Which of the following statements relating to reversing entries is correct?

In a company balance sheet,what are the two main categories equity is separated into?

Income and expense accounts can be referred to as:

The major purpose of a post-closing trial balance is to:

Which of the following is the correct closing entry for sales income of $30 000?

The major purpose of a post-closing trial balance is to:

The post-closing trial balance contains only:

Which of the following statements relating to reversing entries is correct?

Interim statements are:

Which statement relating to the profit or loss summary account is incorrect?

In which order do these steps in the accounting cycle occur? I Prepare closing entries II Post to the ledger III Enter business transactions in the journal IV Prepare adjusting entries V Prepare financial statements

What is the correct closing entry for the bank account?

In accounting for a partnership separate capital and drawings accounts are maintained for each:

A trial balance taken out after the closing process has been completed is called a:

Because income and expenses are accumulated for only one year they are known as:

Decision Making and the Role of Accounting

Financial Statements for Decision Making

Recording Transactions

Adjusting the Accounts and Preparing Financial Statements

Accounting for Retailing

Accounting for Systems

Partnerships: Formation,operation and Reporting

Companies: Formation and Operations

Regulation and the Conceptual Framework

Cash Management and Control

Receivables

Inventories

Non-Current Assets: Acquisition and Depreciation

Non-Current Assets: Revaluation,disposal and Other Aspects

Liabilities

Presentation of Financial Statements

Statement of Cash Flows

Analysis and Interpretation of Financial Statements

Filters

Exam 5: Completing the Accounting Cycle Closing and Reversing Entries

Closing the accounts refers to:

What is the closing entry for drawings of $25 000?

At the end of the period a company often prepares which additional accounting report?

What type of account is retained profits?

On 1 January Make More Company Pty Ltd issued 10 000 shares for $3 each.Which of the following is the correct entry to record this transaction?

Which of the following statements relating to reversing entries is correct?

In a company balance sheet,what are the two main categories equity is separated into?

Income and expense accounts can be referred to as:

The major purpose of a post-closing trial balance is to:

Which of the following is the correct closing entry for sales income of $30 000?

The major purpose of a post-closing trial balance is to:

The post-closing trial balance contains only:

Which of the following statements relating to reversing entries is correct?

Interim statements are:

Which statement relating to the profit or loss summary account is incorrect?

In which order do these steps in the accounting cycle occur? I Prepare closing entries II Post to the ledger III Enter business transactions in the journal IV Prepare adjusting entries V Prepare financial statements

What is the correct closing entry for the bank account?

In accounting for a partnership separate capital and drawings accounts are maintained for each:

A trial balance taken out after the closing process has been completed is called a:

Because income and expenses are accumulated for only one year they are known as:

Decision Making and the Role of Accounting

Financial Statements for Decision Making

Recording Transactions

Adjusting the Accounts and Preparing Financial Statements

Accounting for Retailing

Accounting for Systems

Partnerships: Formation,operation and Reporting

Companies: Formation and Operations

Regulation and the Conceptual Framework

Cash Management and Control

Receivables

Inventories

Non-Current Assets: Acquisition and Depreciation

Non-Current Assets: Revaluation,disposal and Other Aspects

Liabilities

Presentation of Financial Statements

Statement of Cash Flows

Analysis and Interpretation of Financial Statements

Filters