Question 1

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

X...

Question 2

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

Question 3

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.

Question 4

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.

Question 5

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.

Question 6

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\begin{array} { | l | l | } \hline 	ext { Revenue } \$ 800 & 	ext { Cash } \$ 500 \\hline 	ext { Expenses } \$ 400 & 	ext { Accounts Receivable } \$ 350 \\hline 	ext { Capital } \$ 7,500 & 	ext { Withdrawals } \$ 1,000 \\hline\end{array} Revenue $800 Expenses $400 Capital $7,500​ Cash $500 Accounts Receivable $350 Withdrawals $1,000​​  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.

Question 7

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.

Question 8

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

Accepted Answer

A)    Equipment 600 Accumulated Depreciation 600\begin{array}{|l|lcc|}\hline   	ext {Equipment  } & 600 \\hline\quad\quad\quad  \quad\quad	ext { Accumulated Depreciation } &\quad\quad\quad\quad\quad\quad600\\hline \end{array}Equipment  Accumulated Depreciation ​600600​​ 
B)     Depreciation Expense 600 Accumulated Depreciation 600\begin{array} { | c | l | } \hline 	ext { Depreciation Expense } & 600 \\hline 	ext { Accumulated Depreciation } & 600 \\hline\end{array} Depreciation Expense  Accumulated Depreciation ​600600​​ 
C)     Depreciation Expense 600 Equipment 600\begin{array} { | l | l | } \hline 	ext { Depreciation Expense } & 600 \\hline 	ext { Equipment } & 600 \\hline\end{array} Depreciation Expense  Equipment ​600600​​ 
D)     Accumulated Depreciation 600 Depreciation Expense 600\begin{array} { | c | l | } \hline 	ext { Accumulated Depreciation } & 600 \\hline 	ext { Depreciation Expense } & 600 \\hline\end{array} Accumulated Depreciation  Depreciation Expense ​600600​​

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

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 11

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. D

Question 12

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)     Office Supplies  300 Office Supplies Expense 300\begin{array}{l}\begin{array} { | l | l | } \hline	ext { Office Supplies }\ & 300 \\hline 	ext { Office Supplies Expense } & 300 \\hline\end{array}\end{array} Office Supplies   Office Supplies Expense ​300300​​​ 
B)     Office Supplies Expense  500Office Supplies 500\begin{array}{l}\begin{array} { | l | l | } \hline	ext { Office Supplies Expense }\ & 500 \\hline 	ext {Office Supplies } & 500 \\hline\end{array}\end{array} Office Supplies Expense  Office Supplies ​500500​​​ 
C)     Office Supplies  500 Office Supplies Expense 500\begin{array}{l}\begin{array} { | l | l | } 	ext { Office Supplies }\ & 500 \\hline 	ext { Office Supplies Expense } & 500 \\hline\end{array}\end{array} Office Supplies   Office Supplies Expense ​500500​​​ 
D)     Office Supplies Expense 300 Office Supplies 300\begin{array}{l}\\begin{array} { | r | r | } \hline	ext { Office Supplies Expense } & 300 \\hline 	ext { Office Supplies } & 300 \\hline\end{array}\end{array} Office Supplies Expense  Office Supplies ​300300​​​ D

Question 13

Each adjustment affects:

Accepted Answer

A)  the income statement.
B)  the balance sheet.
C)  the cash account.
D)  Both A and B are correct.

Question 14

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 15

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.

Question 16

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.

Question 17

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

Question 18

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

Question 19

Which of the following is not a temporary account?

Accepted Answer

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

Question 20

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.

Exam 5: The Accounting Cycle Completed

Correct Answer
verified
1. R
2. NX...
View Answer

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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:

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified
\[\begin{array} { | l | c | c | c | c | ...
View Answer

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:

Correct Answer
verified
D

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:

Correct Answer
verified
D

Each adjustment affects:

Correct Answer
verified

All permanent accounts can be found:

Correct Answer
verified

When the Withdrawals account is closed:

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Which of the following is not a temporary account?

Correct Answer
verified

Income Summary:

Correct Answer
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Exam 5: The Accounting Cycle Completed

Correct Answerverified1. R2. NX...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answerverified\[\begin{array} { | l | c | c | c | c | ...View AnswerShow Answer

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:

Correct AnswerverifiedD

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:

Correct AnswerverifiedD

Each adjustment affects:

Correct AnswerverifiedShow Answer

All permanent accounts can be found:

Correct AnswerverifiedShow Answer

When the Withdrawals account is closed:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is not a temporary account?

Correct AnswerverifiedShow Answer

Income Summary:

Correct AnswerverifiedShow Answer

Correct Answer
verified
1. R
2. NX...
View Answer

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\[\begin{array} { | l | c | c | c | c | ...
View Answer

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D

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D

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