Question 1

The Income Summary account is:

Accepted Answer

A)   The account from which the amount of the net income or loss is transferred to the owners' capital accounts in a partnership.
B)   A temporary account.
C)   Used in the closing process to summarize the amounts of revenues and expenses.
D)   Not a permanent account.
E)   All of these answers are correct.F) C) and E)
G) A) and E)

Question 2

Explain the purpose of reversing entries.

Accepted Answer

Reversing entries are an optional part o...

Question 3

The first five steps in the accounting cycle include analyzing transactions,journalizing,posting,preparing an unadjusted trial balance,and recording adjusting entries.

Accepted Answer

A) True 
 B)False

Question 4

A company shows an $800 balance in Prepaid Insurance in the Unadjusted Trial Balance columns of the work sheet.The Adjustments columns show expired insurance of $600.This adjusting entry results in:

Accepted Answer

A)   $600 less net income.
B)   $600 more net income.
C)   $200 difference between the debit and credit columns of the unadjusted trial balance.
D)   $400 in the Income Statement Debit column on the work sheet.
E)   $400 in the Balance Sheet Credit column on the work sheet.F) B) and E)
G) B) and D)

Question 5

An expense account is normally closed by debiting Income Summary and crediting the expense account.

Accepted Answer

A) True 
 B)False

Question 6

Accounts that appear in the balance sheet are often called permanent or nominal accounts.

Accepted Answer

A) True 
 B)False

Question 7

The following are selected accounts and their balances after adjustments at May 31,2015,the end of Mark's Furniture Refinishing's fiscal year.

Accepted Answer

The answer of The following are selected accounts and their...

Question 8

A classified balance sheet organizes assets and liabilities into important subgroups.

Accepted Answer

A) True 
 B)False

Question 9

To prepare the income statement all necessary numbers can be found in the income statement columns of the work sheet,including the net income or net loss.

Accepted Answer

A) True 
 B)False

Question 10

On a work sheet,adjusted balances of revenues and expenses are sorted to the Income Statement columns.

Accepted Answer

A) True 
 B)False

Question 11

The Income Summary account is used:

Accepted Answer

A)   To adjust and update asset accounts.
B)   To close the revenue and expense accounts.
C)   To determine the appropriate withdrawal amount.
D)   To replace the income statement under certain circumstances.
E)   To replace the capital account in some businesses.F) A) and B)
G) All of the above

Question 12

Revenue and expense accounts are permanent accounts and should not be closed at the end of the fiscal period.

Accepted Answer

A) True 
 B)False

Question 13

Given the following accounts and their adjusted balances before closing entries are posted,what amount will be posted to Bessie Cool,Capital in the process of closing the Income Summary account? Assume all accounts have normal balances.

Accepted Answer

A)   $7,180 credit.
B)   $16,780 debit.
C)   $16,780 credit.
D)   $18,280 credit.
E)   $23,780 credit.F) B) and C)
G) B) and E)

Question 14

When closing entries are made:

Accepted Answer

A)   All ledger accounts are closed to start the new fiscal period.
B)   All temporary accounts are closed but not the permanent accounts.
C)   All real accounts are closed but not the temporary accounts.
D)   All permanent accounts are closed but not the temporary accounts.
E)   All balance sheet accounts are closed.F) A) and C)
G) B) and D)

Question 15

The Income Summary account is used to close all other temporary accounts at the end of an accounting period.

Accepted Answer

A) True 
 B)False

Question 16

___________________ is an account used only in the closing process.

Accepted Answer

The answer of ___________________ is an account used only in...

Question 17

The closing process is a step in the accounting cycle that prepares accounts for the next accounting period.

Accepted Answer

A) True 
 B)False

Question 18

The asset section of a classified balance sheet includes:

Accepted Answer

A)   Current assets,long-term investments,property,plant and equipment,and intangible assets.
B)   Current assets,long-term assets,equity,and intangible assets.
C)   Current assets,long-term investments,property,plant and equipment,and withdrawals.
D)   Current liabilities,long-term investments,property,plant and equipment,and intangible assets.
E)   Current assets,liabilities,property,plant and equipment,and intangible assets.F) A) and E)
G) A) and B)

Question 19

Describe a classified balance sheet.

Accepted Answer

Classified balance sheets usually report...

Question 20

J.Flow,the proprietor of Flow Services,withdrew $8,700 from his business during 2015.These withdrawals will result in which of the following closing entries at the end of 2015?

Accepted Answer

A)  
B)  
C)  
D)  
E)  F) C) and D)
G) B) and D)

Exam 4: Completing the Accounting Cycle and Classifying Accounts

Accounts that appear in the balance sheet are often called permanent or nominal accounts.

Correct AnswerverifiedShow Answer

The first five steps in the accounting cycle include analyzing transactions,journalizing,posting,preparing an unadjusted trial balance,and recording adjusting entries.

Correct AnswerverifiedShow Answer

The Income Summary account is:

Correct AnswerverifiedShow Answer

The Income Summary account is used:

Correct AnswerverifiedShow Answer

Given the following accounts and their adjusted balances before closing entries are posted,what amount will be posted to Bessie Cool,Capital in the process of closing the Income Summary account? Assume all accounts have normal balances.

Correct AnswerverifiedShow Answer

Explain the purpose of reversing entries.

Correct AnswerverifiedReversing entries are an optional part o...View AnswerShow Answer

The Income Summary account is used to close all other temporary accounts at the end of an accounting period.

Correct AnswerverifiedShow Answer

A company shows an $800 balance in Prepaid Insurance in the Unadjusted Trial Balance columns of the work sheet.The Adjustments columns show expired insurance of $600.This adjusting entry results in:

Correct AnswerverifiedShow Answer

___________________ is an account used only in the closing process.

Correct AnswerverifiedShow Answer

To prepare the income statement all necessary numbers can be found in the income statement columns of the work sheet,including the net income or net loss.

Correct AnswerverifiedShow Answer

The following are selected accounts and their balances after adjustments at May 31,2015,the end of Mark's Furniture Refinishing's fiscal year.

Correct AnswerverifiedShow Answer

Revenue and expense accounts are permanent accounts and should not be closed at the end of the fiscal period.

Correct AnswerverifiedShow Answer

On a work sheet,adjusted balances of revenues and expenses are sorted to the Income Statement columns.

Correct AnswerverifiedShow Answer

A classified balance sheet organizes assets and liabilities into important subgroups.

Correct AnswerverifiedShow Answer

The closing process is a step in the accounting cycle that prepares accounts for the next accounting period.

Correct AnswerverifiedShow Answer

J.Flow,the proprietor of Flow Services,withdrew $8,700 from his business during 2015.These withdrawals will result in which of the following closing entries at the end of 2015?

Correct AnswerverifiedShow Answer

Describe a classified balance sheet.

Correct AnswerverifiedClassified balance sheets usually report...View AnswerShow Answer

The asset section of a classified balance sheet includes:

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When closing entries are made:

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An expense account is normally closed by debiting Income Summary and crediting the expense account.

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Reversing entries are an optional part o...
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Classified balance sheets usually report...
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Correct Answer
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Correct Answer
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