Question 1

The post-closing trial balance will include

Accepted Answer

A)  Accumulated Depreciation.
B)  Depreciation Expense.
C)  Drawing.
D)  Rent Expense.
E)  Income from Services. A

Question 2

Explain the differences between cash and accrual accounting methods.

Accepted Answer

The cash basis of accounting records revenue when cash is received and expenses when cash is paid. Under the accrual method, revenues are recorded when earned, and expenses are recorded when incurred. This method is more complicated and time consuming than the cash method.

Question 3

Which of the following sequences of documents or records describes the proper sequence in the accounting cycle?

Accepted Answer

A)  Source documents, journal, ledger, work sheet, financial statements
B)  Source documents, work sheet, journal, ledger, financial statements
C)  Source documents, ledger, journal, work sheet, financial statements
D)  Work sheet, source documents, financial statements, ledger, journal
E)  Financial statements, journal, ledger, source documents, work sheet A

Question 4

When using the work sheet to prepare closing entries, which of the following statement is correct?

Accepted Answer

A)  You should use all balances listed in the balance sheet columns.
B)  You should use all balances listed in the balance sheet columns and the income statement columns.
C)  You should use all balances listed in the income statement columns.
D)  None of the answers listed

Question 5

If a liability was extended into the Income Statement Credit column on the work sheet, net income would be understated.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is true concerning the steps in the accounting cycle?

Accepted Answer

A)  Preparing a trial balance should be completed before recording business transactions into a journal.
B)  Journalizing and posting the closing entries should be completed after preparing financial statements.
C)  Completing the work sheet should be completed after preparing the financial statements.
D)  Preparing a post-closing trial balance should be completed before completing the work sheet.

Question 7

If expenses are greater than revenue, the Income Summary account will be closed by a debit to

Accepted Answer

A)  Cash and a credit to Income Summary.
B)  Income Summary and a credit to Cash.
C)  Capital and a credit to Income Summary.
D)  Income Summary and a credit to Capital.
E)  Income Summary and a credit to Drawing.

Question 8

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.

Question 9

The _______________ requires that revenue is recorded when earned and expenses are recorded when incurred.

Accepted Answer

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

Question 10

The post-closing trial balance is best prepared from the

Accepted Answer

A)  general ledger.
B)  general journal and the general ledger.
C)  general ledger and the financial statements.
D)  financial statements.
E)  income statement.

Question 11

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

Question 12

Net income for a company is $35,000 for the current year. The owner withdrew $3,500 per month for personal expenses. The owner's Capital account will show a net

Accepted Answer

A)  decrease of $7,000.
B)  increase of $7,000.
C)  decrease of $42,000.
D)  increase of $42,000.
E)  increase of $77,000.

Question 13

The Income Summary account balance should always increase after the closing entries are posted at the end of the accounting period.

Accepted Answer

A) True 
 B)False

Question 14

The first step in the accounting cycle is to

Accepted Answer

A)  analyze source documents and record business transactions in a journal.
B)  prepare a post-closing trial balance.
C)  complete the work sheet.
D)  journalize and post the adjusting entries.

Question 15

The Income Summary account has a debit balance of $10,000 prior to closing. The owner's Drawing account has a balance of $7,000 before closing. The owner's Capital account will

Accepted Answer

A)  decrease $10,000.
B)  increase $17,000.
C)  increase $10,000.
D)  decrease $17,000.
E)  increase $7,000.

Question 16

Both income statement and balance sheet accounts are closed at the end of a fiscal period.

Accepted Answer

A) True 
 B)False

Question 17

Match the terms that follow with the correct definitions.
 
-The ability to transfer financial reports from on program to another.

Accepted Answer

The answer of Match the terms that follow with the...

Question 18

Closing entries are prepared to close the

Accepted Answer

A)  temporary accounts.
B)  accumulated depreciation accounts.
C)  owner's Capital account.
D)  Wages Payable account.
E)  payables and receivables.

Question 19

The owner's Capital account will always have a zero balance after the closing entries are posted.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following accounts will have a remaining balance after the closing process is completed?

Accepted Answer

A)  Income from Services
B)  Rent Expense
C)  Owner's Drawing
D)  Owner's Capital
E)  Depreciation Expense

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

The post-closing trial balance will include

Explain the differences between cash and accrual accounting methods.

Which of the following sequences of documents or records describes the proper sequence in the accounting cycle?

When using the work sheet to prepare closing entries, which of the following statement is correct?

If a liability was extended into the Income Statement Credit column on the work sheet, net income would be understated.

Which of the following statements is true concerning the steps in the accounting cycle?

If expenses are greater than revenue, the Income Summary account will be closed by a debit to

The entry to close revenue would involve a

The _______________ requires that revenue is recorded when earned and expenses are recorded when incurred.

The post-closing trial balance is best prepared from the

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

Net income for a company is $35,000 for the current year. The owner withdrew $3,500 per month for personal expenses. The owner's Capital account will show a net

The Income Summary account balance should always increase after the closing entries are posted at the end of the accounting period.

The first step in the accounting cycle is to

The Income Summary account has a debit balance of $10,000 prior to closing. The owner's Drawing account has a balance of $7,000 before closing. The owner's Capital account will

Both income statement and balance sheet accounts are closed at the end of a fiscal period.

Match the terms that follow with the correct definitions. -The ability to transfer financial reports from on program to another.

Closing entries are prepared to close the

The owner's Capital account will always have a zero balance after the closing entries are posted.

Which of the following accounts will have a remaining balance after the closing process is completed?

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

The post-closing trial balance will include

Explain the differences between cash and accrual accounting methods.

Which of the following sequences of documents or records describes the proper sequence in the accounting cycle?

When using the work sheet to prepare closing entries, which of the following statement is correct?

If a liability was extended into the Income Statement Credit column on the work sheet, net income would be understated.

Which of the following statements is true concerning the steps in the accounting cycle?

If expenses are greater than revenue, the Income Summary account will be closed by a debit to

The entry to close revenue would involve a

The _______________ requires that revenue is recorded when earned and expenses are recorded when incurred.

The post-closing trial balance is best prepared from the

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

Net income for a company is $35,000 for the current year. The owner withdrew $3,500 per month for personal expenses. The owner's Capital account will show a net

The Income Summary account balance should always increase after the closing entries are posted at the end of the accounting period.

The first step in the accounting cycle is to

The Income Summary account has a debit balance of $10,000 prior to closing. The owner's Drawing account has a balance of $7,000 before closing. The owner's Capital account will

Both income statement and balance sheet accounts are closed at the end of a fiscal period.

Match the terms that follow with the correct definitions. -The ability to transfer financial reports from on program to another.

Closing entries are prepared to close the

The owner's Capital account will always have a zero balance after the closing entries are posted.

Which of the following accounts will have a remaining balance after the closing process is completed?

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