Question 1

Why will the Income Summary account never appear on a financial statement?

Accepted Answer

The Income Summary account is used durin

Question 2

Closing entries will:

Accepted Answer

A)  decrease the Owner's Capital. 
B)  increase the Cash balance. 
C)  either increase or decrease Owner's Capital. 
D)  not affect the Owner's Capital balance. 
A)  decrease the Owner's Capital. 
B)  increase the Cash balance. 
C)  either increase or decrease Owner's Capital. 
D)  not affect the Owner's Capital balance.

Question 3

From the following accounts, prepare in proper form a post-closing trial balance for Jones' Pet Sitting on December 31. (Note: These balances are before closing).

Accepted Answer

The answer of From the following accounts, prepare in proper...

Question 4

Income Summary has a credit normal balance.

Accepted Answer

A) True 
 B)False

Question 5

When the balance of the Income Summary account is a debit, the entry to close this account is:

Accepted Answer

A)  debit Income Summary; credit Withdrawals. 
B)  debit Income Summary; credit Revenue. 
C)  debit Capital; credit Income Summary. 
D)  debit Income Summary; credit Capital. 
A)  debit Income Summary; credit Withdrawals. 
B)  debit Income Summary; credit Revenue. 
C)  debit Capital; credit Income Summary. 
D)  debit Income Summary; credit Capital.

Question 6

Nominal accounts are called temporary accounts because their balances are carried forward to the next accounting period.

Accepted Answer

A) True 
 B)False

Question 7

Identify whether the entries below are an adjusting entry (AE) or a closing entry (CE).
-________

Accepted Answer

The answer of Identify whether the entries below are an...

Question 8

Each individual expense account is credited when closing, and the total of all the expense accounts is transferred to Income Summary.

Accepted Answer

A) True 
 B)False

Question 9

After posting the closing entries, which of the following accounts is most likely NOT to have a zero balance?

Accepted Answer

A)  Prepaid Insurance Expense 
B)  Advertising Expense 
C)  J. Taylor, Withdrawals 
D)  Medical Fees Earned 
A)  Prepaid Insurance Expense 
B)  Advertising Expense 
C)  J. Taylor, Withdrawals 
D)  Medical Fees Earned

Question 10

The Rent Expense account had a normal balance of $1,100. The entry to close the account would include a:

Accepted Answer

A)  debit to Rent Expense, $1,100. 
B)  debit to Income Summary, $1,100. 
C)  debit to Capital, $1,100. 
D)  credit to Income Summary, $1,100. 
A)  debit to Rent Expense, $1,100. 
B)  debit to Income Summary, $1,100. 
C)  debit to Capital, $1,100. 
D)  credit to Income Summary, $1,100.

Question 11

The entry to close the expense account(s) was entered in reverse-Income Summary was credited and the expense account(s) was/were debited. The result of this error is that:

Accepted Answer

A)  before closing it, Income Summary will have a credit balance. 
B)  before closing it, Income Summary will have a debit balance. 
C)  the assets will be understated. 
D)  the liabilities will be understated. 
A)  before closing it, Income Summary will have a credit balance. 
B)  before closing it, Income Summary will have a debit balance. 
C)  the assets will be understated. 
D)  the liabilities will be understated.

Question 12

The entry to close Income Summary (net loss) to Capital was omitted. This error will cause:

Accepted Answer

A)  the ending capital to be overstated. 
B)  the ending capital to be understated. 
C)  no error in the ending capital balance. 
D)  None of these is correct. 
A)  the ending capital to be overstated. 
B)  the ending capital to be understated. 
C)  no error in the ending capital balance. 
D)  None of these is correct.

Question 13

Identify whether the entries below are an adjusting entry (AE) or a closing entry (CE).
-________

Accepted Answer

The answer of Identify whether the entries below are an...

Question 14

How do you close the expense accounts?

Accepted Answer

A)  Debit Capital; credit the expense accounts 
B)  Credit Capital; debit the expense accounts 
C)  Credit Income Summary; debit the expense accounts 
D)  Debit Income Summary; credit the expense accounts 
A)  Debit Capital; credit the expense accounts 
B)  Credit Capital; debit the expense accounts 
C)  Credit Income Summary; debit the expense accounts 
D)  Debit Income Summary; credit the expense accounts

Question 15

Each adjusting entry affects:

Accepted Answer

A)  the income statement. 
B)  the balance sheet. 
C)  the cash account. 
D)  Both A and B are correct. 
A)  the income statement. 
B)  the balance sheet. 
C)  the cash account. 
D)  Both A and B are correct.

Question 16

Journal entries that are needed in order to update account balances for internal business transactions (such as supplies and prepaid rent) at the end of the period are:

Accepted Answer

A)  closing entries. 
B)  adjusting entries. 
C)  Balance Sheet entries. 
D)  adjusting Cash. 
A)  closing entries. 
B)  adjusting entries. 
C)  Balance Sheet entries. 
D)  adjusting Cash.

Question 17

The correct order for closing accounts is:

Accepted Answer

A)  revenue, expenses, income summary, withdrawals. 
B)  revenue, income summary, expenses, withdrawals. 
C)  revenue, expenses, capital, withdrawals. 
D)  revenue, capital, expenses, withdrawals. 
A)  revenue, expenses, income summary, withdrawals. 
B)  revenue, income summary, expenses, withdrawals. 
C)  revenue, expenses, capital, withdrawals. 
D)  revenue, capital, expenses, withdrawals.

Question 18

On the basis of the following data taken from the adjusted trial balance columns of the worksheet for the year ended December 31 for Painting the Perfect Picture, journalize the four closing entries in the proper order.

Accepted Answer

The answer of On the basis of the following data...

Question 19

J. Oakely showed a net loss of $5,500. The entry to close the Income Summary account would include a:

Accepted Answer

A)  debit to Oakely, Capital, $5,500. 
B)  debit to Income Summary, $5,500. 
C)  credit to Oakely, Capital, $5,500. 
D)  credit to Cash, $5,500. 
A)  debit to Oakely, Capital, $5,500. 
B)  debit to Income Summary, $5,500. 
C)  credit to Oakely, Capital, $5,500. 
D)  credit to Cash, $5,500.

Question 20

When the balance in the Income Summary account is a credit, the company has:

Accepted Answer

A)  incurred a net loss. 
B)  incurred a net income. 
C)  had more expenses than revenue. 
D)  no owner withdrawals during the period. 
A)  incurred a net loss. 
B)  incurred a net income. 
C)  had more expenses than revenue. 
D)  no owner withdrawals during the period.

Exam 5: The Accounting Cycle Completed

Why will the Income Summary account never appear on a financial statement?

Closing entries will:

From the following accounts, prepare in proper form a post-closing trial balance for Jones' Pet Sitting on December 31. (Note: These balances are before closing).

Income Summary has a credit normal balance.

When the balance of the Income Summary account is a debit, the entry to close this account is:

Nominal accounts are called temporary accounts because their balances are carried forward to the next accounting period.

Identify whether the entries below are an adjusting entry (AE) or a closing entry (CE). -________

Each individual expense account is credited when closing, and the total of all the expense accounts is transferred to Income Summary.

After posting the closing entries, which of the following accounts is most likely NOT to have a zero balance?

The Rent Expense account had a normal balance of $1,100. The entry to close the account would include a:

The entry to close the expense account(s) was entered in reverse-Income Summary was credited and the expense account(s) was/were debited. The result of this error is that:

The entry to close Income Summary (net loss) to Capital was omitted. This error will cause:

Identify whether the entries below are an adjusting entry (AE) or a closing entry (CE). -________

How do you close the expense accounts?

Each adjusting entry affects:

Journal entries that are needed in order to update account balances for internal business transactions (such as supplies and prepaid rent) at the end of the period are:

The correct order for closing accounts is:

On the basis of the following data taken from the adjusted trial balance columns of the worksheet for the year ended December 31 for Painting the Perfect Picture, journalize the four closing entries in the proper order.

J. Oakely showed a net loss of $5,500. The entry to close the Income Summary account would include a:

When the balance in the Income Summary account is a credit, the company has:

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying, Recording, and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property, Plant, Equipment, and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values, Dividends, Treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters