Question 1

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 2

Depreciation Expense is closed to Income Summary, but Accumulated Depreciation is not closed.

Accepted Answer

A) True 
 B)False

Question 3

When Income Summary has a credit balance and the account is closed:

Accepted Answer

A) Capital is decreased. 
B) Capital is increased. 
C) Withdrawals is increased. 
D) None of these are correct. 
A) Capital is decreased. 
B) Capital is increased. 
C) Withdrawals is increased. 
D) None of these are correct.

Question 4

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.

Question 5

The beginning capital balance is $5,350, there are no additional investments but the owner did withdraw $500 during the accounting period. The period's revenue is $5,000 and expenses total $6,500. What is the ending capital balance (after closing entries)?

Accepted Answer

A) $5,350 
B) $2,850 
C) $5,850 
D) $3,350 
A) $5,350 
B) $2,850 
C) $5,850 
D) $3,350

Question 6

The beginning capital balance is $900; there are no additional investments or withdrawals by the owner during the accounting period. The period's revenue is $500 and expenses total $450. What is the ending capital balance (after closing entries)?

Accepted Answer

A) $950 
B) $1,500 
C) $1,450 
D) $50 
A) $950 
B) $1,500 
C) $1,450 
D) $50

Question 7

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

Accepted Answer

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

Question 8

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

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

Closing entries will affect:

Accepted Answer

A) total assets. 
B) Cash. 
C) Owner's Capital. 
D) total liabilities. 
A) total assets. 
B) Cash. 
C) Owner's Capital. 
D) total liabilities.

Question 10

Which of the following accounts is not a temporary account?

Accepted Answer

A) Withdrawals 
B) Fees Earned 
C) Cash 
D) Income Summary 
A) Withdrawals 
B) Fees Earned 
C) Cash 
D) Income Summary

Question 11

When closing the Withdrawal account:

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 12

Which of the following sequence of actions describes the proper order in the accounting cycle?

Accepted Answer

A) Journalize, post, close, prepare financial statements, adjust, and analyze transactions 
B) Prepare financial statements, journalize, post, adjust, analyze transactions, close 
C) Analyze transactions, journalize, post, adjust, prepare financial statements, close 
D) Post, close, prepare financial statements, adjust, analyze transactions, and journalize 
A) Journalize, post, close, prepare financial statements, adjust, and analyze transactions 
B) Prepare financial statements, journalize, post, adjust, analyze transactions, close 
C) Analyze transactions, journalize, post, adjust, prepare financial statements, close 
D) Post, close, prepare financial statements, adjust, analyze transactions, and journalize

Question 13

To close the Withdrawals account:

Accepted Answer

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

Question 14

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 15

Closing entries will:

Accepted Answer

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

Question 16

The adjusting entry to record the expired rent would be to:

Accepted Answer

A) debit Prepaid Rent; credit Rent Expense. 
B) debit Cash; credit Prepaid Rent. 
C) debit Prepaid Rent; credit Cash. 
D) debit Rent Expense; credit Prepaid Rent. 
A) debit Prepaid Rent; credit Rent Expense. 
B) debit Cash; credit Prepaid Rent. 
C) debit Prepaid Rent; credit Cash. 
D) debit Rent Expense; credit Prepaid Rent.

Question 17

Tina's Event Planning bought a computer worth $3,500 with an expected life of 5 years and a residual value of $750. What is the adjusting journal entry after the first year?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 18

Determine the beginning assets of a business having ending liabilities of $4,000, the liabilities decreased by $1,500 during the year, an ending owner's equity of $10,700, additional investments of $2,000, withdrawals of $15,600, and after closing the revenues and expenses the Income Summary account has a credit balance of $6,800.
$ ________

Accepted Answer

$23,000 [($4,000 + $

Question 19

Adjusting journal entries:

Accepted Answer

A) need not be journalized since they appear on the worksheet. 
B) need not be posted if the financial statements are prepared from the worksheet. 
C) are not needed if closing entries are prepared. 
D) must be journalized and posted. 
A) need not be journalized since they appear on the worksheet. 
B) need not be posted if the financial statements are prepared from the worksheet. 
C) are not needed if closing entries are prepared. 
D) must be journalized and posted.

Question 20

The post-closing trial balance is used to determine if the ledger is in balance after closing.

Accepted Answer

A) True 
 B)False

Exam 5: The Accounting Cycle Completed

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

Depreciation Expense is closed to Income Summary, but Accumulated Depreciation is not closed.

When Income Summary has a credit balance and the account is closed:

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:

The beginning capital balance is $5,350, there are no additional investments but the owner did withdraw $500 during the accounting period. The period's revenue is $5,000 and expenses total $6,500. What is the ending capital balance (after closing entries)?

The beginning capital balance is $900; there are no additional investments or withdrawals by the owner during the accounting period. The period's revenue is $500 and expenses total $450. What is the ending capital balance (after closing entries)?

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

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

Closing entries will affect:

Which of the following accounts is not a temporary account?

When closing the Withdrawal account:

Which of the following sequence of actions describes the proper order in the accounting cycle?

To close the Withdrawals account:

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

Closing entries will:

The adjusting entry to record the expired rent would be to:

Tina's Event Planning bought a computer worth $3,500 with an expected life of 5 years and a residual value of $750. What is the adjusting journal entry after the first year?

Adjusting journal entries:

The post-closing trial balance is used to determine if the ledger is in balance after closing.

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

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