Question 1

The journal entry to close the income summary account (showing a net loss) includes

Accepted Answer

A)  debiting the drawing account and crediting Income Summary. 
B)  debiting Income Summary and crediting the drawing account. 
C)  debiting the owner's capital account and crediting Income Summary. 
D)  debiting Income Summary and crediting the owner's capital account. 
A)  debiting the drawing account and crediting Income Summary. 
B)  debiting Income Summary and crediting the drawing account. 
C)  debiting the owner's capital account and crediting Income Summary. 
D)  debiting Income Summary and crediting the owner's capital account. C

Question 2

A separate explanation of each closing entry is necessary.

Accepted Answer

A) True 
 B)False  False

Question 3

(Appendix) The three types of business activities are operating activities, investing activities, and financing activities.

Accepted Answer

A) True 
 B)False  True

Question 4

Capital at the beginning of the month amounted to $4,000; net income for the month amounted to $1,000; and withdrawals for personal use during the month amounted to $2,000. Capital at the end of the month is

Accepted Answer

A)  $3,000. 
B)  $2,000. 
C)  $7,000. 
D)  $5,000. 
A)  $3,000. 
B)  $2,000. 
C)  $7,000. 
D)  $5,000.

Question 5

A post-closing trial balance is used to prove the equality of debit and credit balances in the general ledger accounts after the closing entries have been posted.

Accepted Answer

A) True 
 B)False

Question 6

What is the purpose of the post-closing trial balance?

Accepted Answer

A)  to prove no errors were made while recording entries in the journal 
B)  to prove the equality of the debit and credit balances in the general ledger accounts 
C)  to prove the closing entries were recorded correctly in the journal 
D)  to prove the balances in the general ledger accounts are correct 
A)  to prove no errors were made while recording entries in the journal 
B)  to prove the equality of the debit and credit balances in the general ledger accounts 
C)  to prove the closing entries were recorded correctly in the journal 
D)  to prove the balances in the general ledger accounts are correct

Question 7

The total revenue of the month of June amounted to $6,500; total expenses amounted to $3,500; and withdrawals amounted to $600. The net income for the month amounted to

Accepted Answer

A)  $6,000. 
B)  $2,400. 
C)  $3,000. 
D)  $3,500. 
A)  $6,000. 
B)  $2,400. 
C)  $3,000. 
D)  $3,500.

Question 8

Match the terms with the definitions.
-Obligations that are not expected to be paid within a year and do not require the use of current assets.

Accepted Answer

A) account form of balance sheet 
B) accounting cycle 
C) classified balance sheet 
D) closing process 
E) current assets
F)current liabilities
G)Income Summary
H)long-term liabilities
I)operating cycle
J)permanent accounts
K)post-closing trial balance
L)property, plant, and equipment
M)report form of balance sheet
N)temporary accounts 
A) account form of balance sheet 
B) accounting cycle 
C) classified balance sheet 
D) closing process 
E) current assets
F)current liabilities
G)Income Summary
H)long-term liabilities
I)operating cycle
J)permanent accounts
K)post-closing trial balance
L)property, plant, and equipment
M)report form of balance sheet
N)temporary accounts

Question 9

Expenses on the income statement could be listed in the same order as they appear in the chart of accounts.

Accepted Answer

A) True 
 B)False

Question 10

Match the terms with the definitions.
-Prepared after posting the closing entries to prove the equality of the debit and credit balances in the general ledger accounts.

Accepted Answer

A) account form of balance sheet 
B) accounting cycle 
C) classified balance sheet 
D) closing process 
E) current assets
F)current liabilities
G)Income Summary
H)long-term liabilities
I)operating cycle
J)permanent accounts
K)post-closing trial balance
L)property, plant, and equipment
M)report form of balance sheet
N)temporary accounts 
A) account form of balance sheet 
B) accounting cycle 
C) classified balance sheet 
D) closing process 
E) current assets
F)current liabilities
G)Income Summary
H)long-term liabilities
I)operating cycle
J)permanent accounts
K)post-closing trial balance
L)property, plant, and equipment
M)report form of balance sheet
N)temporary accounts

Question 11

Obligations that need not be paid for a long time, usually more than one year, are classified as current liabilities.

Accepted Answer

A) True 
 B)False

Question 12

The journal entry to close the drawing account includes

Accepted Answer

A)  debiting the owner's capital account and crediting the drawing account. 
B)  debiting the drawing account and crediting the owner's capital account. 
C)  debiting Income Summary and crediting the drawing account. 
D)  debiting the drawing account and crediting Income Summary. 
A)  debiting the owner's capital account and crediting the drawing account. 
B)  debiting the drawing account and crediting the owner's capital account. 
C)  debiting Income Summary and crediting the drawing account. 
D)  debiting the drawing account and crediting Income Summary.

Question 13

Adjusting entries are recorded and posted after closing entries.

Accepted Answer

A) True 
 B)False

Question 14

The journal entry to close expense accounts includes

Accepted Answer

A)  debiting the expense accounts and crediting Income Summary. 
B)  debiting Income Summary and crediting the expense accounts. 
C)  debiting the expense accounts and crediting the owner's capital account. 
D)  debiting the expense accounts and crediting the drawing account. 
A)  debiting the expense accounts and crediting Income Summary. 
B)  debiting Income Summary and crediting the expense accounts. 
C)  debiting the expense accounts and crediting the owner's capital account. 
D)  debiting the expense accounts and crediting the drawing account.

Question 15

Match the terms with the definitions.
-A temporary account used in the closing process to summarize the effects of all revenue and expense accounts.

Accepted Answer

A) account form of balance sheet 
B) accounting cycle 
C) classified balance sheet 
D) closing process 
E) current assets
F)current liabilities
G)Income Summary
H)long-term liabilities
I)operating cycle
J)permanent accounts
K)post-closing trial balance
L)property, plant, and equipment
M)report form of balance sheet
N)temporary accounts 
A) account form of balance sheet 
B) accounting cycle 
C) classified balance sheet 
D) closing process 
E) current assets
F)current liabilities
G)Income Summary
H)long-term liabilities
I)operating cycle
J)permanent accounts
K)post-closing trial balance
L)property, plant, and equipment
M)report form of balance sheet
N)temporary accounts

Question 16

To close the drawing account with a debit balance, credit the account for its balance and debit the owner's capital account.

Accepted Answer

A) True 
 B)False

Question 17

The statement of owner's equity is prepared from information from the asset and liability accounts.

Accepted Answer

A) True 
 B)False

Question 18

Match the terms with the definitions.
-A balance sheet in which the liabilities and the owner's equity sections are shown below the assets section.

Accepted Answer

A) account form of balance sheet 
B) accounting cycle 
C) classified balance sheet 
D) closing process 
E) current assets
F)current liabilities
G)Income Summary
H)long-term liabilities
I)operating cycle
J)permanent accounts
K)post-closing trial balance
L)property, plant, and equipment
M)report form of balance sheet
N)temporary accounts 
A) account form of balance sheet 
B) accounting cycle 
C) classified balance sheet 
D) closing process 
E) current assets
F)current liabilities
G)Income Summary
H)long-term liabilities
I)operating cycle
J)permanent accounts
K)post-closing trial balance
L)property, plant, and equipment
M)report form of balance sheet
N)temporary accounts

Question 19

Expenses on the income statement could be listed in alphabetical order by dollar amount.

Accepted Answer

A) True 
 B)False

Question 20

Match the terms with the definitions.
-Assets that are expected to serve the business for many years.

Accepted Answer

A) account form of balance sheet 
B) accounting cycle 
C) classified balance sheet 
D) closing process 
E) current assets
F)current liabilities
G)Income Summary
H)long-term liabilities
I)operating cycle
J)permanent accounts
K)post-closing trial balance
L)property, plant, and equipment
M)report form of balance sheet
N)temporary accounts 
A) account form of balance sheet 
B) accounting cycle 
C) classified balance sheet 
D) closing process 
E) current assets
F)current liabilities
G)Income Summary
H)long-term liabilities
I)operating cycle
J)permanent accounts
K)post-closing trial balance
L)property, plant, and equipment
M)report form of balance sheet
N)temporary accounts

The journal entry to close the income summary account (showing a net loss) includes

A separate explanation of each closing entry is necessary.

(Appendix) The three types of business activities are operating activities, investing activities, and financing activities.

Capital at the beginning of the month amounted to $4,000; net income for the month amounted to $1,000; and withdrawals for personal use during the month amounted to $2,000. Capital at the end of the month is

A post-closing trial balance is used to prove the equality of debit and credit balances in the general ledger accounts after the closing entries have been posted.

What is the purpose of the post-closing trial balance?

The total revenue of the month of June amounted to $6,500; total expenses amounted to $3,500; and withdrawals amounted to $600. The net income for the month amounted to

Match the terms with the definitions. -Obligations that are not expected to be paid within a year and do not require the use of current assets.

Expenses on the income statement could be listed in the same order as they appear in the chart of accounts.

Match the terms with the definitions. -Prepared after posting the closing entries to prove the equality of the debit and credit balances in the general ledger accounts.

Obligations that need not be paid for a long time, usually more than one year, are classified as current liabilities.

The journal entry to close the drawing account includes

Adjusting entries are recorded and posted after closing entries.

The journal entry to close expense accounts includes

Match the terms with the definitions. -A temporary account used in the closing process to summarize the effects of all revenue and expense accounts.

To close the drawing account with a debit balance, credit the account for its balance and debit the owner's capital account.

The statement of owner's equity is prepared from information from the asset and liability accounts.

Match the terms with the definitions. -A balance sheet in which the liabilities and the owner's equity sections are shown below the assets section.

Expenses on the income statement could be listed in alphabetical order by dollar amount.

Match the terms with the definitions. -Assets that are expected to serve the business for many years.

Introduction to Accounting

Analyzing Transactions: the Accounting Equation

The Double-Entry Framework

Journalizing and Posting Transactions

Adjusting Entries and the Work Sheet

Accounting for Cash

Payroll Accounting: Employer Taxes and Reports

Accounting for Sales and Cash Receipts

Accounting for Purchases and Cash Payments

Special Journals

Accounting for Merchandise Inventory

Adjustments and the Work Sheet for a Merchandising Business

Financial Statements and Year-End Accounting for a Merchandising Business

Accounting for a Professional Service Business: The Combination Journal

Filters

Exam 6: Financial Statements and the Closing Process

The journal entry to close the income summary account (showing a net loss) includes

A separate explanation of each closing entry is necessary.

(Appendix) The three types of business activities are operating activities, investing activities, and financing activities.

Capital at the beginning of the month amounted to $4,000; net income for the month amounted to $1,000; and withdrawals for personal use during the month amounted to $2,000. Capital at the end of the month is

A post-closing trial balance is used to prove the equality of debit and credit balances in the general ledger accounts after the closing entries have been posted.

What is the purpose of the post-closing trial balance?

The total revenue of the month of June amounted to $6,500; total expenses amounted to $3,500; and withdrawals amounted to $600. The net income for the month amounted to

Match the terms with the definitions. -Obligations that are not expected to be paid within a year and do not require the use of current assets.

Expenses on the income statement could be listed in the same order as they appear in the chart of accounts.

Match the terms with the definitions. -Prepared after posting the closing entries to prove the equality of the debit and credit balances in the general ledger accounts.

Obligations that need not be paid for a long time, usually more than one year, are classified as current liabilities.

The journal entry to close the drawing account includes

Adjusting entries are recorded and posted after closing entries.

The journal entry to close expense accounts includes

Match the terms with the definitions. -A temporary account used in the closing process to summarize the effects of all revenue and expense accounts.

To close the drawing account with a debit balance, credit the account for its balance and debit the owner's capital account.

The statement of owner's equity is prepared from information from the asset and liability accounts.

Match the terms with the definitions. -A balance sheet in which the liabilities and the owner's equity sections are shown below the assets section.

Expenses on the income statement could be listed in alphabetical order by dollar amount.

Match the terms with the definitions. -Assets that are expected to serve the business for many years.

Introduction to Accounting

Analyzing Transactions: the Accounting Equation

The Double-Entry Framework

Journalizing and Posting Transactions

Adjusting Entries and the Work Sheet

Accounting for Cash

Payroll Accounting: Employer Taxes and Reports

Accounting for Sales and Cash Receipts

Accounting for Purchases and Cash Payments

Special Journals

Accounting for Merchandise Inventory

Adjustments and the Work Sheet for a Merchandising Business

Financial Statements and Year-End Accounting for a Merchandising Business

Accounting for a Professional Service Business: The Combination Journal

Filters