Question 1

Closing the dividends account to Retained Earnings is not necessary if net income is greater than dividends during the period.

Accepted Answer

A) True 
 B)False

Question 2

Which account listed below would be double ruled (double underline)  in the ledger as part of the closing process?

Accepted Answer

A)  Cash
B)  Retained Earnings
C)  Dividends
D)  Accumulated Depreciation-Equipment

Question 3

The first required step in the accounting cycle is to

Accepted Answer

A)  prepare reversing entries.
B)  journalize transactions in the book of original entry.
C)  analyze transactions.
D)  post transactions.

Question 4

Cash and supplies are both classified as current assets.

Accepted Answer

A) True 
 B)False

Question 5

Each of the following accounts is closed to Income Summary except

Accepted Answer

A)  Expenses.
B)  Dividends.
C)  Revenues.
D)  All of these are closed to Income Summary.

Question 6

The following items are taken from the financial statements of Gray's Postal Service for the year ending December 31, 2021:  What is the company's net income for the year ending December 31, 2021?

Accepted Answer

A)  $12,000
B)  $28,000
C)  $42,000
D)  $133,000

Question 7

The heading for a post-closing trial balance has a date line that is similar to the one found on

Accepted Answer

A)  the balance sheet.
B)  the income statement.
C)  the retained earnings statement.
D)  the worksheet.

Question 8

The following information is for Sunny Day Real Estate:  The total dollar amount of assets to be classified as property, plant, and equipment is

Accepted Answer

A)  $200,000.
B)  $220,000.
C)  $285,000.
D)  $305,000.

Question 9

The income statement for the year 2021 of Fugazi Co.contains the following information:  After the revenue and expense accounts have been closed, the balance in Income Summary will be

Accepted Answer

A)  $0.
B)  a debit balance of $7,500.
C)  a credit balance of $7,500.
D)  a credit balance of $70,000.

Question 10

When using a worksheet, adjusting entries are journalized

Accepted Answer

A)  after the worksheet is completed and before financial statements are prepared.
B)  before the adjustments are entered on to the worksheet.
C)  after the worksheet is completed and after financial statements have been prepared.
D)  before the adjusted trial balance is extended to the proper financial statement columns.

Question 11

Closing entries are

Accepted Answer

A)  an optional step in the accounting cycle.
B)  posted to the ledger accounts from the worksheet.
C)  made to close permanent or real accounts.
D)  journalized in the general journal.

Question 12

Which one of the following is usually performed only at the end of a company's annual accounting period?

Accepted Answer

A)  Preparing financial statements
B)  Journalizing and posting adjusting entries
C)  Journalizing and posting closing entries
D)  Preparing an adjusted trial balance

Question 13

The dividends account is a permanent account whose balance is carried forward to the next accounting period.

Accepted Answer

A) True 
 B)False

Question 14

The dividends account is closed to the Income Summary account in order to properly determine net income (or loss) for the period.

Accepted Answer

A) True 
 B)False

Question 15

On September 23, Sebadoh Company received a $350 check from Surfer Rosa Inc.for services to be performed in the future.The bookkeeper for Sebadoh Company incorrectly debited Cash for $350 and credited Accounts Receivable for $350.The amounts have been posted to the ledger.To correct this entry, the bookkeeper should

Accepted Answer

A)  debit Cash $350 and credit Unearned Service Revenue $350.
B)  debit Accounts Receivable $350 and credit Unearned Service Revenue $350.
C)  debit Accounts Receivable $350 and credit Cash $350.
D)  debit Accounts Receivable $350 and credit Service Revenue $350.

Question 16

A current asset is

Accepted Answer

A)  the last asset purchased by a business.
B)  an asset which is currently being used to produce a product or service.
C)  usually found as a separate classification in the income statement.
D)  an asset that a company expects to convert to cash or use up within one year.

Question 17

If a worksheet is used, financial statements can be prepared before adjusting entries are journalized.

Accepted Answer

A) True 
 B)False

Question 18

The balance in the Income Summary account before it is closed will be equal to

Accepted Answer

A)  the net income or loss on the income statement.
B)  the beginning balance in the retained earnings account.
C)  the ending balance in the retained earnings account.
D)  zero.

Question 19

The income statement for the month of June, 2021 of Camera Obscura Enterprises contains the following information:  The entry to close Income Summary to Retained Earnings includes

Accepted Answer

A)  a debit to Revenues for $7,000.
B)  credits to Expenses totalling $5,700.
C)  a credit to Income Summary for $1,300
D)  a credit to Retained Earnings for $1,300.

Question 20

The account, Supplies, will appear in the following debit columns of the worksheet.

Accepted Answer

A)  Trial balance
B)  Adjusted trial balance
C)  Balance sheet
D)  All of these answer choices are correct

Exam 4: Completing the Accounting Cycle

The income statement for the month of June, 2021 of Camera Obscura Enterprises contains the following information: The entry to close Income Summary to Retained Earnings includes

Correct Answer
verified

Which account listed below would be double ruled (double underline) in the ledger as part of the closing process?

Correct Answer
verified

Closing entries are

Correct Answer
verified

Correct Answer
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Each of the following accounts is closed to Income Summary except

Correct Answer
verified

Cash and supplies are both classified as current assets.

Correct Answer
verified

The account, Supplies, will appear in the following debit columns of the worksheet.

Correct Answer
verified

Which one of the following is usually performed only at the end of a company's annual accounting period?

Correct Answer
verified

The dividends account is closed to the Income Summary account in order to properly determine net income (or loss) for the period.

Correct Answer
verified

The following items are taken from the financial statements of Gray's Postal Service for the year ending December 31, 2021: What is the company's net income for the year ending December 31, 2021?

Correct Answer
verified

Closing the dividends account to Retained Earnings is not necessary if net income is greater than dividends during the period.

Correct Answer
verified

The heading for a post-closing trial balance has a date line that is similar to the one found on

Correct Answer
verified

A current asset is

Correct Answer
verified

The balance in the Income Summary account before it is closed will be equal to

Correct Answer
verified

The dividends account is a permanent account whose balance is carried forward to the next accounting period.

Correct Answer
verified

The income statement for the year 2021 of Fugazi Co.contains the following information: After the revenue and expense accounts have been closed, the balance in Income Summary will be

Correct Answer
verified

The first required step in the accounting cycle is to

Correct Answer
verified

The following information is for Sunny Day Real Estate: The total dollar amount of assets to be classified as property, plant, and equipment is

Correct Answer
verified

When using a worksheet, adjusting entries are journalized

Correct Answer
verified

If a worksheet is used, financial statements can be prepared before adjusting entries are journalized.

Correct Answer
verified

Exam 4: Completing the Accounting Cycle

The income statement for the month of June, 2021 of Camera Obscura Enterprises contains the following information: The entry to close Income Summary to Retained Earnings includes

Correct AnswerverifiedShow Answer

Which account listed below would be double ruled (double underline) in the ledger as part of the closing process?

Correct AnswerverifiedShow Answer

Closing entries are

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Each of the following accounts is closed to Income Summary except

Correct AnswerverifiedShow Answer

Cash and supplies are both classified as current assets.

Correct AnswerverifiedShow Answer

The account, Supplies, will appear in the following debit columns of the worksheet.

Correct AnswerverifiedShow Answer

Which one of the following is usually performed only at the end of a company's annual accounting period?

Correct AnswerverifiedShow Answer

The dividends account is closed to the Income Summary account in order to properly determine net income (or loss) for the period.

Correct AnswerverifiedShow Answer

The following items are taken from the financial statements of Gray's Postal Service for the year ending December 31, 2021: What is the company's net income for the year ending December 31, 2021?

Correct AnswerverifiedShow Answer

Closing the dividends account to Retained Earnings is not necessary if net income is greater than dividends during the period.

Correct AnswerverifiedShow Answer

The heading for a post-closing trial balance has a date line that is similar to the one found on

Correct AnswerverifiedShow Answer

A current asset is

Correct AnswerverifiedShow Answer

The balance in the Income Summary account before it is closed will be equal to

Correct AnswerverifiedShow Answer

The dividends account is a permanent account whose balance is carried forward to the next accounting period.

Correct AnswerverifiedShow Answer

The income statement for the year 2021 of Fugazi Co.contains the following information: After the revenue and expense accounts have been closed, the balance in Income Summary will be

Correct AnswerverifiedShow Answer

The first required step in the accounting cycle is to

Correct AnswerverifiedShow Answer

The following information is for Sunny Day Real Estate: The total dollar amount of assets to be classified as property, plant, and equipment is

Correct AnswerverifiedShow Answer

When using a worksheet, adjusting entries are journalized

Correct AnswerverifiedShow Answer

If a worksheet is used, financial statements can be prepared before adjusting entries are journalized.

Correct AnswerverifiedShow Answer

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