Question 1

The entry to close Income Summary (net loss)to Capital was omitted.This error will cause:

Accepted Answer

A) the ending capital to be overstated. 
B) the ending capital to be understated. 
C) no error in the ending capital balance. 
D) None of these are correct. 
A) the ending capital to be overstated. 
B) the ending capital to be understated. 
C) no error in the ending capital balance. 
D) None of these are correct.

Question 2

The beginning capital balance is $900; there are no additional investments or withdrawals by the owner during the accounting period.The period's revenue is $500 and expenses total $450.What is the ending capital balance (after closing entries)?

Accepted Answer

A) $950 
B) $1,500 
C) $1,450 
D) $50 
A) $950 
B) $1,500 
C) $1,450 
D) $50

Question 3

The goal of closing is to clear all temporary accounts and update Capital.

Accepted Answer

A) True 
 B)False

Question 4

To close the Withdrawals account:

Accepted Answer

A) debit Withdrawals; credit Capital. 
B) debit Capital; credit Withdrawals. 
C) debit Withdrawals; credit Income Summary. 
D) debit Income Summary; credit Withdrawals. 
A) debit Withdrawals; credit Capital. 
B) debit Capital; credit Withdrawals. 
C) debit Withdrawals; credit Income Summary. 
D) debit Income Summary; credit Withdrawals.

Question 5

Determine the beginning owner's equity of a business having an ending owner's equity of $6,200,withdrawals of $2,250,and after closing the revenues and expenses,the Income Summary account has a debit balance of $3,500.
$ ________

Accepted Answer

$11,950 [$

Question 6

The balance in Income Summary after posting all revenues and expenses for the period is equal to net income/loss.

Accepted Answer

A) True 
 B)False

Question 7

When closing the Withdrawal account:

Accepted Answer

A) Capital would increase. 
B) Capital would decrease. 
C) Capital would remain the same. 
D) None of these are correct. 
A) Capital would increase. 
B) Capital would decrease. 
C) Capital would remain the same. 
D) None of these are correct.

Question 8

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).
$$\begin{array}{l}
\text { Example: }\
\begin{array} { | l | l | l | r | l | } 
\hline & \text { Column } 1 & \text { Column 2 } & \text { Column } 3 & \text { Column } 4 \
\hline \text { Cash } & \text { Asset } & \text { Debit } & \text { Balance Sheet } & \text { Permanent } \
\hline
\end{array}
\end{array}$$
-$$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 & \text { Column } 4 \
\hline \text { Depreciation } & & & & \
\text { Expense } & & & & \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | l | l | l | l | c |

Question 9

Journal entries that are needed in order to update account balances for internal business transactions (such as supplies and prepaid rent)at the end of the period are:

Accepted Answer

A) closing entries. 
B) adjusting entries. 
C) sales entries. 
D) None of the above are correct. 
A) closing entries. 
B) adjusting entries. 
C) sales entries. 
D) None of the above are correct.

Question 10

J.Oros showed a net loss of $3,200.The entry to close the Income Summary account would include a:

Accepted Answer

A) debit to Oros,Capital,$3,200. 
B) debit to Income Summary ,$3,200. 
C) credit to Oros,Capital,$3,200. 
D) credit to Cash,$3,200. 
A) debit to Oros,Capital,$3,200. 
B) debit to Income Summary ,$3,200. 
C) credit to Oros,Capital,$3,200. 
D) credit to Cash,$3,200.

Question 11

Which of the following accounts is not a temporary account?

Accepted Answer

A) Withdrawals 
B) Fees Earned 
C) Cash 
D) Income Summary 
A) Withdrawals 
B) Fees Earned 
C) Cash 
D) Income Summary

Question 12

The adjusting entry to record the expired rent would be to:

Accepted Answer

A) debit Prepaid Rent; credit Rent Expense. 
B) debit Cash; credit Prepaid Rent. 
C) debit Prepaid Rent; credit Cash. 
D) debit Rent Expense; credit Prepaid Rent. 
A) debit Prepaid Rent; credit Rent Expense. 
B) debit Cash; credit Prepaid Rent. 
C) debit Prepaid Rent; credit Cash. 
D) debit Rent Expense; credit Prepaid Rent.

Question 13

A real account is the same as a permanent account.

Accepted Answer

A) True 
 B)False

Question 14

The income statement debit column of the worksheet showed the following expenses: $$\begin{array} { l | r } 
\hline \text { Supplies Expense } & \$ 600 \
\hline \text { Depreciation Expense } & 400 \
\hline \text { Salaries Expense } & 300 \
\hline
\end{array}$$ The journal entry to close the expense accounts is:

Accepted Answer

A)  $$\begin{array}{l}

\begin{array} { r | r | } 
\hline \text { Income Summary }& 1,300 \
\hline \text { Supplies Expense } & 600 \
\hline \text { Depreciation Expense } & 400 \
\hline \text { Salaries Expense } & 300 \
\hline
\end{array}
\end{array}$$ 
B)  $$\begin{array} { | c | l | } 
\hline \text { Income Summary} & 1,200 \
\hline \text { Capital} & 1,200 \
\hline
\end{array}$$ 
C)  $\begin{array}{|l|lcc|}
  \hline\text { Supplies Expense } &500  \
\hline \text { Depreciation Expense } &400\
 \hline\text { Salaries Expense } &300\
\hline \quad\quad\quad\text { Income Summary } &\quad\quad\quad\quad1,200\
\hline
\end{array}$ 
D)  $\begin{array}{|l|lcc|}
\hline \text { Capital }& 1,200 \
 \hline\quad\quad\quad\quad\text { Income Summary  } &\quad\quad\quad\quad1,200\
 \hline
\end{array}$ 
A)  $$\begin{array}{l}

\begin{array} { r | r | } 
\hline \text { Income Summary }& 1,300 \
\hline \text { Supplies Expense } & 600 \
\hline \text { Depreciation Expense } & 400 \
\hline \text { Salaries Expense } & 300 \
\hline
\end{array}
\end{array}$$ 
B)  $$\begin{array} { | c | l | } 
\hline \text { Income Summary} & 1,200 \
\hline \text { Capital} & 1,200 \
\hline
\end{array}$$ 
C)  $\begin{array}{|l|lcc|}
  \hline\text { Supplies Expense } &500  \
\hline \text { Depreciation Expense } &400\
 \hline\text { Salaries Expense } &300\
\hline \quad\quad\quad\text { Income Summary } &\quad\quad\quad\quad1,200\
\hline
\end{array}$ 
D)  $\begin{array}{|l|lcc|}
\hline \text { Capital }& 1,200 \
 \hline\quad\quad\quad\quad\text { Income Summary  } &\quad\quad\quad\quad1,200\
 \hline
\end{array}$

Question 15

When the balance of the Income Summary account is a debit,the entry to close this account is:

Accepted Answer

A) debit Capital; credit Income Summary. 
B) debit Income Summary; credit Revenue. 
C) debit Revenue; credit Income Summary. 
D) debit Income Summary; credit Capital. 
A) debit Capital; credit Income Summary. 
B) debit Income Summary; credit Revenue. 
C) debit Revenue; credit Income Summary. 
D) debit Income Summary; credit Capital.

Question 16

The following normal account balances were found on the general ledger before closing entries were prepared: $$\begin{array} { | l | l | } 
\hline \text { Revenue } \$ 700 & \text { Cash } \$ 600 \
\hline \text { Expenses } \$ 400 & \text { Accounts Receivable } \$ 400 \
\hline \text { Capital } \$ 7,500 & \text { Withdrawals } \$ 1,000 \
\hline
\end{array}$$ After closing entries are posted,what is the balance in the Capital account?

Accepted Answer

A) $7,800 
B) $7,500 
C) $6,800 
D) Closing entries do not affect the Capital account. 
A) $7,800 
B) $7,500 
C) $6,800 
D) Closing entries do not affect the Capital account.

Question 17

Determine the beginning assets of a business having ending liabilities of $4,000,the liabilities decreased by $1,500 during the year,an ending owner's equity of $10,700,additional investments of $2,000,withdrawals of $15,600,and after closing the revenues and expenses the Income Summary account has a credit balance of $6,800.
$ ________

Accepted Answer

$23,000 [($4,000 + $

Question 18

From the following items in the income statement columns of the worksheet of Monaghan Company at December 31,prepare the closing entries without explanation,assuming that a $500 withdrawal was made during the period.
 $\begin{array}{c}
\begin{array}{lll}
\
\underline{\text {Account}}\
\text {Service Revenue}\
\text {Wages Expense}\
\text {Rent Expense}\
\text {Supplies Expense}\
\text {Insurance Expense}\
\
\text {Net Loss}\
\
\end{array}
\begin{array}{lll}
\
\underline{\text {Debit}}\
\

500 \
250 \
100 \
\underline{50}\
950 \
----\
\underline{\$ 950}
\end{array}
\begin{array}{lll}
\underline{\text {Income Statemen}}\
\underline{\text {Credit}}\
900\
\
\
\
-----\
900 \
\underline{50}\
\underline{\$ 950} 
\end{array}
\end{array}$

Accepted Answer

None

Question 19

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. Cash}\
 \text {2.  Tennis Fees}\
 \text {3. Accounts Receivable }\
 \text {4. Accumulated Depreciation }\
 \text {5. Withdrawals}\
 \text {6. Prepaid Rent}\
 \text {7. Income Summary}\
 \text {8. Utilities Expense }
\end{array}

\end{array}$

Accepted Answer

1. R
2. N@#LAT-DLM&@#LAT-DLM&X

Question 20

Closing entries:

Accepted Answer

A) need not be journalized since they appear on the worksheet. 
B) need not be posted if the financial statements are prepared from the worksheet. 
C) are not needed if adjusting entries are prepared. 
D) must be journalized and posted. 
A) need not be journalized since they appear on the worksheet. 
B) need not be posted if the financial statements are prepared from the worksheet. 
C) are not needed if adjusting entries are prepared. 
D) must be journalized and posted.

Exam 5: The Accounting Cycle Completed

The entry to close Income Summary (net loss)to Capital was omitted.This error will cause:

The beginning capital balance is $900; there are no additional investments or withdrawals by the owner during the accounting period.The period's revenue is $500 and expenses total $450.What is the ending capital balance (after closing entries)?

The goal of closing is to clear all temporary accounts and update Capital.

To close the Withdrawals account:

Determine the beginning owner's equity of a business having an ending owner's equity of $6,200,withdrawals of $2,250,and after closing the revenues and expenses,the Income Summary account has a debit balance of $3,500. $ ________

The balance in Income Summary after posting all revenues and expenses for the period is equal to net income/loss.

When closing the Withdrawal account:

Journal entries that are needed in order to update account balances for internal business transactions (such as supplies and prepaid rent)at the end of the period are:

J.Oros showed a net loss of $3,200.The entry to close the Income Summary account would include a:

Which of the following accounts is not a temporary account?

The adjusting entry to record the expired rent would be to:

A real account is the same as a permanent account.

The income statement debit column of the worksheet showed the following expenses: Supplies Expense \ 600 Depreciation Expense 400 Salaries Expense 300 The journal entry to close the expense accounts is:

When the balance of the Income Summary account is a debit,the entry to close this account is:

The following normal account balances were found on the general ledger before closing entries were prepared: Revenue \ 700 Cash \ 600 Expenses \ 400 Accounts Receivable \ 400 Capital \ 7,500 Withdrawals \ 1,000 After closing entries are posted,what is the balance in the Capital account?

Closing entries:

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: The Beginning of the Payroll Process

Paying,recording,and Reporting Payroll and Payroll Taxes: The Conclusion of the Payroll Process

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property, plant, equipment, and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values, dividends, treasury Stocks, and Retained Earnings

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

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