Question 1

The entry to close the Withdrawal account was entered in reverse-the Withdrawal account was debited and Capital credited.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 end of period capital will be understated. 
D) the end of period capital will be overstated. 
A) before closing it,Income Summary will have a credit balance. 
B) before closing it,Income Summary will have a debit balance. 
C) the end of period capital will be understated. 
D) the end of period capital will be overstated. D

Question 2

Samantha's Design Studio showed office supplies available of $800.A count of the supplies left on hand as of June 30 was $500.The adjusting journal entry is:

Accepted Answer

A)  $$\begin{array}{l}

\begin{array} { | l | l | } 
\hline\text { Office Supplies }\ & 300 \
\hline \text { Office Supplies Expense } & 300 \
\hline
\end{array}
\end{array}$$ 
B)  $$\begin{array}{l}

\begin{array} { | l | l | } 
\hline\text { Office Supplies Expense }\ & 500 \
\hline \text {Office Supplies } & 500 \
\hline
\end{array}
\end{array}$$ 
C)  $$\begin{array}{l}

\begin{array} { | l | l | } 
\text { Office Supplies }\ & 500 \
\hline \text { Office Supplies Expense } & 500 \
\hline
\end{array}
\end{array}$$ 
D)  $$\begin{array}{l}
\
\begin{array} { | r | r | } 
\hline\text { Office Supplies Expense } & 300 \
\hline \text { Office Supplies } & 300 \
\hline
\end{array}
\end{array}$$ 
A)  $$\begin{array}{l}

\begin{array} { | l | l | } 
\hline\text { Office Supplies }\ & 300 \
\hline \text { Office Supplies Expense } & 300 \
\hline
\end{array}
\end{array}$$ 
B)  $$\begin{array}{l}

\begin{array} { | l | l | } 
\hline\text { Office Supplies Expense }\ & 500 \
\hline \text {Office Supplies } & 500 \
\hline
\end{array}
\end{array}$$ 
C)  $$\begin{array}{l}

\begin{array} { | l | l | } 
\text { Office Supplies }\ & 500 \
\hline \text { Office Supplies Expense } & 500 \
\hline
\end{array}
\end{array}$$ 
D)  $$\begin{array}{l}
\
\begin{array} { | r | r | } 
\hline\text { Office Supplies Expense } & 300 \
\hline \text { Office Supplies } & 300 \
\hline
\end{array}
\end{array}$$ D

Question 3

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.
 $$\begin{array} { l l l } 
\text { Account } & \text { Debit } & \text { Credit } \
\text { Cash } & 20,000 & \
\text { Accounts Receivable } & 67,000 & \
\text { Supplies } & 7,000 & \
\text { Equipment } & 200,000 \
\text { Accumulated Depreciation } & & 70,000 \
\text { Accounts Payable } & & 30,000 \
\text { Capital } & & 200,250 \
\text { Withdrawals } & 25,000 & \
\text { Fees Earned } & &100,000 \
\text { Salary Expense } & 27,000 & \
\text { Rent Expense } & 17,500 & \
\text { Depreciation Expense } & 20,000 & \
\text { Supplies Expense } & 12,500 & \
\text { Miscellaneous Expense } & 4,250 & \
\text { Total } & \underline { 400,250 } & \underline { 400,250 }\
\end{array}$$

Accepted Answer

$\begin{array}{llcc}
  \text { Fees Earned } & 100,000 \
 \text {  Income Summary} &&100,000\
\end{array}$
 $\begin{array}{llcc}
  \text {  Income Summary} &81,250  \
 \text { Salary Expense } &&27,000\
 \text {Rent Expense  } &&17,500\
 \text {Depreciation Expense  } &&20,000\
 \text { Supplies Expense } &&12,500\
 \text {  Miscellaneous Expense } &&4,250\
\end{array}$
 $\begin{array}{llcc}
  \text { Income Summary } &18,750  \
 \text {  Capital} &&18,750\
\end{array}$
 $\begin{array}{llcc}
  \text { Capital } &25,000  \
 \text { Withdrawals} &&25,000\
\end{array}$

Question 4

Income Summary:

Accepted Answer

A) is a temporary account. 
B) is a permanent account. 
C) summarizes revenue and expenses and transfers the balance to Capital. 
D) Both A and C are correct. 
A) is a temporary account. 
B) is a permanent account. 
C) summarizes revenue and expenses and transfers the balance to Capital. 
D) Both A and C are correct.

Question 5

Each adjustment 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 6

All permanent accounts can be found:

Accepted Answer

A) on the Income Statement. 
B) on the Statement of Owner's Equity. 
C) on the Balance Sheet. 
D) Permanent accounts do not appear on the financial statements. 
A) on the Income Statement. 
B) on the Statement of Owner's Equity. 
C) on the Balance Sheet. 
D) Permanent accounts do not appear on the financial statements.

Question 7

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

Accepted Answer

A) Prepaid Insurance 
B) Advertising Expense 
C) J)Smith,Withdrawals 
D) Medical Fees 
A) Prepaid Insurance 
B) Advertising Expense 
C) J)Smith,Withdrawals 
D) Medical Fees

Question 8

When closing the Income Summary account when there is a net loss:

Accepted Answer

A) Capital would increase. 
B) Capital would decrease. 
C) Capital would remain the same. 
D) None of these are correct. 
A) Capital would increase. 
B) Capital would decrease. 
C) Capital would remain the same. 
D) None of these are correct.

Question 9

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) made an error in their closing entries. 
A) incurred a net loss. 
B) incurred a net income. 
C) had more expenses than revenue. 
D) made an error in their closing entries.

Question 10

In the first space below,indicate whether each account is a real or nominal account using (R)Real Account and (N)Nominal Account.In the second space below,indicate by an (X)if the account should be closed.
$\begin{array}{c}
\begin{array}{lll}
\underline{\text { N }}\
----\
----\
----\
----\
----\
----\
----\
----\
----\
\
\end{array}
\begin{array}{lll}
\underline{\text { X }}\
----\
----\
----\
----\
----\
----\
----\
----\
----\
\
\end{array}
\begin{array}{lll}
 \text {0. Advertising Expense}\
 \text {1. Prepaid Insurance}\
 \text {2. Service Fees}\
 \text {3. Depreciation Expense}\
 \text {4. Accumulated Depreciation}\
 \text {5. Salaries Payable}\
 \text {6. Prepaid Rent}\
 \text {7. Income Summary}\
 \text {8. Insurance Expense}
\end{array}

\end{array}$

Accepted Answer

1. R
2. N@#LAT-DLM&@#LAT-DLM&X

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 overstated. 
D) the liabilities will be overstated. 
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 overstated. 
D) the liabilities will be overstated.

Question 12

Which of the following accounts would not be considered a permanent account?

Accepted Answer

A) Accounts Receivable 
B) Salaries Expense 
C) Accounts Payable 
D) Office Supplies 
A) Accounts Receivable 
B) Salaries Expense 
C) Accounts Payable 
D) Office Supplies

Question 13

Mark's Tree Service depreciation for the month is $600.The adjusting journal entry is:

Accepted Answer

A)  $\begin{array}{|l|lcc|}
\hline   \text {Equipment  } & 600 \
\hline\quad\quad\quad  \quad\quad\text { Accumulated Depreciation } &\quad\quad\quad\quad\quad\quad600\
\hline 
\end{array}$ 
B)  $$\begin{array} { | c | l | } 
\hline \text { Depreciation Expense } & 600 \
\hline \text { Accumulated Depreciation } & 600 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | l | } 
\hline \text { Depreciation Expense } & 600 \
\hline \text { Equipment } & 600 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | l | } 
\hline \text { Accumulated Depreciation } & 600 \
\hline \text { Depreciation Expense } & 600 \
\hline
\end{array}$$ 
A)  $\begin{array}{|l|lcc|}
\hline   \text {Equipment  } & 600 \
\hline\quad\quad\quad  \quad\quad\text { Accumulated Depreciation } &\quad\quad\quad\quad\quad\quad600\
\hline 
\end{array}$ 
B)  $$\begin{array} { | c | l | } 
\hline \text { Depreciation Expense } & 600 \
\hline \text { Accumulated Depreciation } & 600 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | l | } 
\hline \text { Depreciation Expense } & 600 \
\hline \text { Equipment } & 600 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | l | } 
\hline \text { Accumulated Depreciation } & 600 \
\hline \text { Depreciation Expense } & 600 \
\hline
\end{array}$$

Question 14

The entry to close Income Summary (net loss)was entered in reverse-Income Summary was debited and Capital was credited.This error will cause:

Accepted Answer

A) Income Summary to have a credit balance. 
B) Income Summary to have a debit balance. 
C) the assets to be overstated. 
D) the liabilities to be overstated. 
A) Income Summary to have a credit balance. 
B) Income Summary to have a debit balance. 
C) the assets to be overstated. 
D) the liabilities to be overstated.

Question 15

The Withdrawals account is closed to the Owner's Capital account.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following accounts will be directly closed to Capital at the end of the fiscal year?

Accepted Answer

A) Salaries Expense 
B) Fees Revenue 
C) Withdrawals 
D) Depreciation Expense 
A) Salaries Expense 
B) Fees Revenue 
C) Withdrawals 
D) Depreciation Expense

Question 17

Which of the following is not a temporary account?

Accepted Answer

A) Wages Expense 
B) Service Fees 
C) Rent Expense 
D) Capital 
A) Wages Expense 
B) Service Fees 
C) Rent Expense 
D) Capital

Question 18

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, in Column 3 the financial statement on which the account balance is reported, and in Column 4 the nature of the account (permanent/temporary).
$$\begin{array}{l}
\text { Example: }\
\begin{array} { | l | l | l | r | l | } 
\hline & \text { Column } 1 & \text { Column 2 } & \text { Column } 3 & \text { Column } 4 \
\hline \text { Cash } & \text { Asset } & \text { Debit } & \text { Balance Sheet } & \text { Permanent } \
\hline
\end{array}
\end{array}$$
-$$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 & \text { Column } 4 \
\hline \text { Accumulated } & & & & \
\text { Depreciation } & & & & \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | l | c | c | c | c |

Question 19

When the Withdrawals account is closed:

Accepted Answer

A) Owner's Capital will be debited. 
B) Income Summary will be debited. 
C) Income Summary will be credited. 
D) None of these are correct. 
A) Owner's Capital will be debited. 
B) Income Summary will be debited. 
C) Income Summary will be credited. 
D) None of these are correct.

Question 20

The following normal account balances were found on the general ledger before closing entries were prepared: $$\begin{array} { | l | l | } 
\hline \text { Revenue } \$ 800 & \text { Cash } \$ 500 \
\hline \text { Expenses } \$ 400 & \text { Accounts Receivable } \$ 350 \
\hline \text { Capital } \$ 7,500 & \text { Withdrawals } \$ 1,000 \
\hline
\end{array}$$ After closing entries are posted,what is the balance in the Revenue account?

Accepted Answer

A) $800 
B) $0 
C) $300 
D) Closing entries do not affect Revenue. 
A) $800 
B) $0 
C) $300 
D) Closing entries do not affect Revenue.

Exam 5: The Accounting Cycle Completed

The entry to close the Withdrawal account was entered in reverse-the Withdrawal account was debited and Capital credited.The result of this error is that:

Samantha's Design Studio showed office supplies available of $800.A count of the supplies left on hand as of June 30 was $500.The adjusting journal entry is:

Income Summary:

Each adjustment affects:

All permanent accounts can be found:

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

When closing the Income Summary account when there is a net loss:

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

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:

Which of the following accounts would not be considered a permanent account?

Mark's Tree Service depreciation for the month is $600.The adjusting journal entry is:

The entry to close Income Summary (net loss)was entered in reverse-Income Summary was debited and Capital was credited.This error will cause:

The Withdrawals account is closed to the Owner's Capital account.

Which of the following accounts will be directly closed to Capital at the end of the fiscal year?

Which of the following is not a temporary account?

When the Withdrawals account is closed:

The following normal account balances were found on the general ledger before closing entries were prepared: Revenue \ 800 Cash \ 500 Expenses \ 400 Accounts Receivable \ 350 Capital \ 7,500 Withdrawals \ 1,000 After closing entries are posted,what is the balance in the Revenue account?

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: The Conclusion of the Payroll Process

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, and Retained Earnings

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters