Question 1

Below is an alphabetical list of accounts of Master Cleaners as of December 31, after all adjusting entries have been posted.
Instructions:
 $\begin{array}{lr}\text { Accounts Payable } & \$ 2,700 \
\text { Accumulated Depreciation, Equipment } & 2,800 \
\text { Cash } & 2,600 \
\text { Depreciation Expense, Equipment } & 700 \
\text { E. Hess, Capital } & 6,200 \
\text { E. Hess, Drawing } & 7,000 \
\text { Equipment } & 12,300 \
\text { Income from Services } & 29,800 \
\text { Income Summary } &\
\text { Insurance Expense } & 1,600 \
\text { Miscellaneous Expense } & 300 \
\text { Frepaid Insurance } & 200 \
\text { Rent Expense } & 2,400 \
\text { Advertising Expense } & 900 \
\text { Utilities Expense } & 800 \
\text { Wages Expense } & 3,700
\end{array}$ 
1. Journalize the four closing entries in the proper order.
2. Record the account balances in t-accounts for owner's equity, revenue, and expense accounts. Post the closing entries in these t-accounts using number 1 through 4.
3. Prepare a post-closing trial balance.

Accepted Answer

2.

E. Hess, Capital

E. Hess, Drawi...

Question 2

Which of the following is true of the effect of net loss on financial statements?

Accepted Answer

A)   It decreases the cash account balance.
B)   It increases expenses.
C)   It decreases the owner's capital account balance.
D)   It decreases accounts payable.
E)   It increases the owner's drawing account balance. C

Question 3

Match the terms that follow with the correct definitions.
-List of the final balances of the general ledger after end-of-year procedures

Accepted Answer

A)  Interim statements
B)  Closing entries
C)  Expenses
D)  Real or permanent accounts
E)  Drawing accountF) Income SummaryG) Post-closing trial balanceH) Accounting cycleI) Expense and revenueJ) Temporary-equity accounts

Question 4

The balance in the owner's Capital account is closed to the owner's Drawing account.

Accepted Answer

A) True 
 B)False

Question 5

The balance of Accumulated Depreciation will normally appear on the income statement.

Accepted Answer

A) True 
 B)False

Question 6

The adjusted balances for Tomas Co. are listed below.
 Cash, $20,000
Accounts Receivable, $2,500
Prepaid Insurance, $3,500
Equipment, $15,000
Accumulated Depreciation, $2,000
Accounts Payable, $4,000
J. Tomas, Capital, $30,000
J. Tomas, Drawing, $10,000
Income from Services, $35,000
Wages Expense, $12,000
Rent Expense, $8,000
The entry to close expenses would involve a

Accepted Answer

A)   debit to Income Summary, $20,000
B)   credit to Income Summary, $20,000
C)   debit to Income Summary, $12,000.
D)   debit to Wages Expense, $12,000, and Rent Expense, $8,000.

Question 7

The Income Summary account would be reported on which financial statement?

Accepted Answer

A)   Income Statement
B)   Balance Sheet
C)   Statement of Owner's Equity
D)   None. The Income Summary account is not reported on a financial statement.

Question 8

The entry to close Income Summary, assuming a net loss, would involve a

Accepted Answer

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

Question 9

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

Question 10

Match the terms that follow with the correct definitions.
-Clearing the accounts or bringing to zero balance

Accepted Answer

A)  Interim statements
B)  Closing entries
C)  Expenses
D)  Real or permanent accounts
E)  Drawing accountF) Income SummaryG) Post-closing trial balanceH) Accounting cycleI) Expense and revenueJ) Temporary-equity accounts B

Question 11

If L. Green's total revenue for the year was $38,000 and total expenses were $30,000, the third closing entry would be

Accepted Answer

A)   debit Income Summary; credit L. Green, Capital.
B)   debit L. Green, Capital; credit Income Summary.
C)   debit Income Summary; credit Income from Services.
D)   debit Income from Services; credit Income Summary.
E)   debit L. Green, Capital; credit L. Green, Drawing.

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

Munoz Co. prepays cash in October for insurance that covers only the month of November. Munoz Co. records the expense in October. Which method of accounting is Munoz Co. using?

Accepted Answer

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

Question 14

The salaries payable account is:

Accepted Answer

A)   closed into the capital account.
B)   closed into the drawing account.
C)   shown on the balance sheet as a liability.
D)   shown on the income statement.
E)   shown on the balance sheet as an asset.

Question 15

Which of the following are all temporary accounts?

Accepted Answer

A)   Liabilities, revenue, and expenses
B)   Revenue, liabilities, and the owner's Drawing
C)   Assets, liabilities, and owner's Drawing
D)   Revenue, expenses, and the Owner's Drawing
E)   Liabilities and assets

Question 16

The last step in the closing procedure closes

Accepted Answer

A)   the Income Summary account.
B)   the Capital account.
C)   the Drawing account.
D)   the expense accounts.
E)   all liability accounts.

Question 17

Match the terms that follow with the correct definitions.
-Process in which preparing the post-closing trial balance is the last step

Accepted Answer

A)  Interim statements
B)  Closing entries
C)  Expenses
D)  Real or permanent accounts
E)  Drawing accountF) Income SummaryG) Post-closing trial balanceH) Accounting cycleI) Expense and revenueJ) Temporary-equity accounts

Question 18

After closing the expense accounts, the total of the expense accounts will appear on the debit side of the Income Summary account.

Accepted Answer

A) True 
 B)False

Question 19

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 20

Which of the following accounts would not be involved in closing entries?

Accepted Answer

A)   Advertising Expense
B)   J. Ryan, Drawing
C)   Salaries Payable
D)   Income from Services
E)   Rent Expense

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

Correct Answer
verified
2.
E. Hess, Capital

E. Hess, Drawi...
View Answer

Which of the following is true of the effect of net loss on financial statements?

Correct Answer
verified
C

Match the terms that follow with the correct definitions. -List of the final balances of the general ledger after end-of-year procedures

Correct Answer
verified

The balance in the owner's Capital account is closed to the owner's Drawing account.

Correct Answer
verified

The balance of Accumulated Depreciation will normally appear on the income statement.

Correct Answer
verified

Correct Answer
verified

The Income Summary account would be reported on which financial statement?

Correct Answer
verified

The entry to close Income Summary, assuming a net loss, would involve a

Correct Answer
verified

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

Correct Answer
verified

Match the terms that follow with the correct definitions. -Clearing the accounts or bringing to zero balance

Correct Answer
verified
B

If L. Green's total revenue for the year was $38,000 and total expenses were $30,000, the third closing entry would be

Correct Answer
verified

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

Correct Answer
verified

Munoz Co. prepays cash in October for insurance that covers only the month of November. Munoz Co. records the expense in October. Which method of accounting is Munoz Co. using?

Correct Answer
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B

The salaries payable account is:

Correct Answer
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Which of the following are all temporary accounts?

Correct Answer
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The last step in the closing procedure closes

Correct Answer
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Match the terms that follow with the correct definitions. -Process in which preparing the post-closing trial balance is the last step

Correct Answer
verified

After closing the expense accounts, the total of the expense accounts will appear on the debit side of the Income Summary account.

Correct Answer
verified

Closing entries are prepared to close the

Correct Answer
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Which of the following accounts would not be involved in closing entries?

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

Correct Answerverified2. E. Hess, Capital​ E. Hess, Drawi...View AnswerShow Answer

Which of the following is true of the effect of net loss on financial statements?

Correct AnswerverifiedC

Match the terms that follow with the correct definitions. -List of the final balances of the general ledger after end-of-year procedures

Correct AnswerverifiedShow Answer

The balance in the owner's Capital account is closed to the owner's Drawing account.

Correct AnswerverifiedShow Answer

The balance of Accumulated Depreciation will normally appear on the income statement.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The Income Summary account would be reported on which financial statement?

Correct AnswerverifiedShow Answer

The entry to close Income Summary, assuming a net loss, would involve a

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Match the terms that follow with the correct definitions. -Clearing the accounts or bringing to zero balance

Correct AnswerverifiedB

If L. Green's total revenue for the year was $38,000 and total expenses were $30,000, the third closing entry would be

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Munoz Co. prepays cash in October for insurance that covers only the month of November. Munoz Co. records the expense in October. Which method of accounting is Munoz Co. using?

Correct AnswerverifiedB

The salaries payable account is:

Correct AnswerverifiedShow Answer

Which of the following are all temporary accounts?

Correct AnswerverifiedShow Answer

The last step in the closing procedure closes

Correct AnswerverifiedShow Answer

Match the terms that follow with the correct definitions. -Process in which preparing the post-closing trial balance is the last step

Correct AnswerverifiedShow Answer

After closing the expense accounts, the total of the expense accounts will appear on the debit side of the Income Summary account.

Correct AnswerverifiedShow Answer

Closing entries are prepared to close the

Correct AnswerverifiedShow Answer

Which of the following accounts would not be involved in closing entries?

Correct AnswerverifiedShow Answer

Correct Answer
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2.
E. Hess, Capital

E. Hess, Drawi...
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C

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B

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B

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