Question 1

Which of the following accounts would be closed into Income Summary in the procedure of closing accounts at the end of a fiscal period?

Accepted Answer

A)  Rent Payable 
B)  Cash 
C)  Insurance Expense 
D)  Accumulated Depreciation 
A)  Rent Payable 
B)  Cash 
C)  Insurance Expense 
D)  Accumulated Depreciation

Question 2

The debit to Income Summary in the second closing entry represents the total expenses.

Accepted Answer

A) True 
 B)False

Question 3

After the temporary accounts are closed, only the real accounts have balances.

Accepted Answer

A) True 
 B)False

Question 4

The second step in the closing process is to close the _____________ account(s) into the ___________ account(s).

Accepted Answer

A)  expense, income summary 
B)  income summary, expense 
C)  expense, net income 
D)  revenue, income summary 
A)  expense, income summary 
B)  income summary, expense 
C)  expense, net income 
D)  revenue, income summary

Question 5

Match the terms that follow with the correct definitions.
-Accounts that are not closed out at the end of each fiscal year

Accepted Answer

A) Interim statements 
B) Closing entries 
C) Expenses 
D) Real or permanent accounts 
E) Drawing account
F)Income Summary
G)Post-closing trial balance
H)Accounting cycle
I)Expense and revenue
J)Temporary-equity accounts 
A) Interim statements 
B) Closing entries 
C) Expenses 
D) Real or permanent accounts 
E) Drawing account
F)Income Summary
G)Post-closing trial balance
H)Accounting cycle
I)Expense and revenue
J)Temporary-equity accounts

Question 6

The balance of Wages Payable will normally appear on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 7

Closing entries may be prepared from the ledger or the work sheet.

Accepted Answer

A) True 
 B)False

Question 8

Match the terms that follow with the correct definitions.
-Accounts that belong to only one fiscal year and are closed out at the end of each fiscal year

Accepted Answer

A) Interim statements 
B) Closing entries 
C) Expenses 
D) Real or permanent accounts 
E) Drawing account
F)Income Summary
G)Post-closing trial balance
H)Accounting cycle
I)Expense and revenue
J)Temporary-equity accounts 
A) Interim statements 
B) Closing entries 
C) Expenses 
D) Real or permanent accounts 
E) Drawing account
F)Income Summary
G)Post-closing trial balance
H)Accounting cycle
I)Expense and revenue
J)Temporary-equity accounts

Question 9

Which of the following steps follows the recording of a business transaction in a journal?

Accepted Answer

A)  Posting of journal entries to the accounts in a ledger 
B)  Preparing a post-closing trial balance 
C)  Completing the work sheet 
D)  Journalizing and posting adjusting entries 
A)  Posting of journal entries to the accounts in a ledger 
B)  Preparing a post-closing trial balance 
C)  Completing the work sheet 
D)  Journalizing and posting adjusting entries

Question 10

Closing entries are posted to the work sheet, but not to the general ledger.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is the last step in the procedure of closing accounts at the end of a fiscal period?

Accepted Answer

A)  Close the expense account(s) into Income Summary. 
B)  Close the drawing account into the capital account. 
C)  Close the revenue account(s) into Income Summary. 
D)  Close the income summary account into the capital account. 
A)  Close the expense account(s) into Income Summary. 
B)  Close the drawing account into the capital account. 
C)  Close the revenue account(s) into Income Summary. 
D)  Close the income summary account into the capital account.

Question 12

Financial statements prepared during the fiscal year for periods of less than twelve months are called interim statements.

Accepted Answer

A) True 
 B)False

Question 13

A net loss always increases liabilities.

Accepted Answer

A) True 
 B)False

Question 14

The entry to close the drawing account would involve a

Accepted Answer

A)  debit to capital. 
B)  credit to cash. 
C)  debit to Income Summary. 
D)  credit to net income. 
A)  debit to capital. 
B)  credit to cash. 
C)  debit to Income Summary. 
D)  credit to net income.

Question 15

In the current year, Taylor Company incurred a net loss of $70,000. The owner of the company regularly invested $7,000 per month in the business. The owner's capital account will show a net:

Accepted Answer

A)  increase of $7,000. 
B)  increase of $14,000. 
C)  decrease of $63,000. 
D)  increase of $77,000. 
E)  decrease of $7,000. 
A)  increase of $7,000. 
B)  increase of $14,000. 
C)  decrease of $63,000. 
D)  increase of $77,000. 
E)  decrease of $7,000.

Question 16

The entry to close revenue would involve a

Accepted Answer

A)  debit to capital. 
B)  credit to Income Summary. 
C)  debit to net income. 
D)  credit to revenue. 
A)  debit to capital. 
B)  credit to Income Summary. 
C)  debit to net income. 
D)  credit to revenue.

Question 17

Which of the following accounts would be shown on the post-closing trial balance?

Accepted Answer

A)  Supplies Expense 
B)  Wages Payable 
C)  Depreciation, Equipment 
D)  Income from Services 
A)  Supplies Expense 
B)  Wages Payable 
C)  Depreciation, Equipment 
D)  Income from Services

Question 18

The _______________ requires that revenue is recorded when it is received in cash and expenses are recorded when they are paid in cash.

Accepted Answer

A)  accrual basis of accounting 
B)  cash basis of accounting 
C)  hybrid basis of accounting 
D)  GAAP basis of accounting 
A)  accrual basis of accounting 
B)  cash basis of accounting 
C)  hybrid basis of accounting 
D)  GAAP basis of accounting

Question 19

If a business has a net loss for a fiscal period, the journal entry to close the Income Summary account is a debit to Income Summary and a credit to Capital.

Accepted Answer

A) True 
 B)False

Question 20

Match the terms that follow with the correct definitions.
-The account used to record amounts taken out of the business by the owner

Accepted Answer

A) Interim statements 
B) Closing entries 
C) Expenses 
D) Real or permanent accounts 
E) Drawing account
F)Income Summary
G)Post-closing trial balance
H)Accounting cycle
I)Expense and revenue
J)Temporary-equity accounts 
A) Interim statements 
B) Closing entries 
C) Expenses 
D) Real or permanent accounts 
E) Drawing account
F)Income Summary
G)Post-closing trial balance
H)Accounting cycle
I)Expense and revenue
J)Temporary-equity accounts

Which of the following accounts would be closed into Income Summary in the procedure of closing accounts at the end of a fiscal period?

The debit to Income Summary in the second closing entry represents the total expenses.

After the temporary accounts are closed, only the real accounts have balances.

The second step in the closing process is to close the ___ account(s) into the _ account(s).

Match the terms that follow with the correct definitions. -Accounts that are not closed out at the end of each fiscal year

The balance of Wages Payable will normally appear on the balance sheet.

Closing entries may be prepared from the ledger or the work sheet.

Match the terms that follow with the correct definitions. -Accounts that belong to only one fiscal year and are closed out at the end of each fiscal year

Which of the following steps follows the recording of a business transaction in a journal?

Closing entries are posted to the work sheet, but not to the general ledger.

Which of the following is the last step in the procedure of closing accounts at the end of a fiscal period?

Financial statements prepared during the fiscal year for periods of less than twelve months are called interim statements.

A net loss always increases liabilities.

The entry to close the drawing account would involve a

In the current year, Taylor Company incurred a net loss of $70,000. The owner of the company regularly invested $7,000 per month in the business. The owner's capital account will show a net:

The entry to close revenue would involve a

Which of the following accounts would be shown on the post-closing trial balance?

The _______________ requires that revenue is recorded when it is received in cash and expenses are recorded when they are paid in cash.

If a business has a net loss for a fiscal period, the journal entry to close the Income Summary account is a debit to Income Summary and a credit to Capital.

Match the terms that follow with the correct definitions. -The account used to record amounts taken out of the business by the owner

Asset, Liability, Owners Equity, Revenue, and Expense Accounts

T Accounts, Debits and Credits, Trial Balance, and Financial Statements

The General Journal and the General Ledger

Adjusting Entries and the Work Sheet

Bank Accounts, Cash Funds, and Internal Controls

Employee Earnings and Deductions

Employer Taxes, Payments, and Reports

Sales and Purchases

Cash Receipts and Cash Payments

Work Sheet and Adjusting Entries

Financial Statements, Closing Entries, and Reversing Entries

Methods of Depreciation

Bad Debts

Inventory Methods

Notes Receivablenotes Payable

Filters

Exam 5: Closing Entries and the Post-Closing Trial Balance

Which of the following accounts would be closed into Income Summary in the procedure of closing accounts at the end of a fiscal period?

The debit to Income Summary in the second closing entry represents the total expenses.

After the temporary accounts are closed, only the real accounts have balances.

The second step in the closing process is to close the _____________ account(s) into the ___________ account(s).

Match the terms that follow with the correct definitions. -Accounts that are not closed out at the end of each fiscal year

The balance of Wages Payable will normally appear on the balance sheet.

Closing entries may be prepared from the ledger or the work sheet.

Match the terms that follow with the correct definitions. -Accounts that belong to only one fiscal year and are closed out at the end of each fiscal year

Which of the following steps follows the recording of a business transaction in a journal?

Closing entries are posted to the work sheet, but not to the general ledger.

Which of the following is the last step in the procedure of closing accounts at the end of a fiscal period?

Financial statements prepared during the fiscal year for periods of less than twelve months are called interim statements.

A net loss always increases liabilities.

The entry to close the drawing account would involve a

In the current year, Taylor Company incurred a net loss of $70,000. The owner of the company regularly invested $7,000 per month in the business. The owner's capital account will show a net:

The entry to close revenue would involve a

Which of the following accounts would be shown on the post-closing trial balance?

The _______________ requires that revenue is recorded when it is received in cash and expenses are recorded when they are paid in cash.

If a business has a net loss for a fiscal period, the journal entry to close the Income Summary account is a debit to Income Summary and a credit to Capital.

Match the terms that follow with the correct definitions. -The account used to record amounts taken out of the business by the owner

Asset, Liability, Owners Equity, Revenue, and Expense Accounts

T Accounts, Debits and Credits, Trial Balance, and Financial Statements

The General Journal and the General Ledger

Adjusting Entries and the Work Sheet

Bank Accounts, Cash Funds, and Internal Controls

Employee Earnings and Deductions

Employer Taxes, Payments, and Reports

Sales and Purchases

Cash Receipts and Cash Payments

Work Sheet and Adjusting Entries

Financial Statements, Closing Entries, and Reversing Entries

Methods of Depreciation

Bad Debts

Inventory Methods

Notes Receivablenotes Payable

Filters

The second step in the closing process is to close the ___ account(s) into the _ account(s).