Question Details

ACCT/257 ACCT257 ACCT 257 CHAP 05 MULTIPLE CHOICE QUESTIONS PART 2


	41.	After the adjusting entries are journalized and posted to the accounts in the general ledger, the balance of each account should agree with the balance shown on the
a.	adjusted trial balance.
b.	post-closing trial balance.
c.	the general journal.
d.	adjustments columns of the worksheet.

	56.	Closing entries are necessary for
a.	permanent accounts only.
b.	temporary accounts only.
c.	both permanent and temporary accounts.
d.	permanent or real accounts only.

	57.	Each of the following accounts is closed to Income Summary except
a.	Expenses.
b.	Dividends.
c.	Revenues.
d.	All of these are closed to Income Summary.

	58.	Closing entries are made
a.	in order to terminate the business as an operating entity.
b.	so that all assets, liabilities, and Stockholders' equity accounts will have zero balances when the next accounting period starts.
c.	in order to transfer net income (or loss) and dividends to the retained earnings account.
d.	so that financial statements can be prepared.

	60.	The income summary account
a.	is a permanent account.
b.	appears on the balance sheet.
c.	appears on the income statement.
d.	is a temporary account.

	61.	If Income Summary has a credit balance after revenues and expenses have been closed into it, the closing entry for Income Summary will include a
a.	debit to the retained earnings account.
b.	debit to the owner- dividends account.
c.	credit to the retained earnings account.
d.	credit to the owner- dividends account.

	62.	Closing entries are journalized and posted
a.	before the financial statements are prepared.
b.	after the financial statements are prepared.
c.	at management's discretion.
d.	at the end of each interim accounting period.

	63.	Closing entries
a.	are prepared before the financial statements.
b.	reduce the number of permanent accounts.
c.	cause the revenue and expense accounts to have zero balances.
d.	summarize the activity in every account.

	64.	Which of the following is a true statement about closing the books of a corporation?
a.	Expenses are closed to the Expense Summary account.
b.	Only revenues are closed to the Income Summary account.
c.	Revenues and expenses are closed to the Income Summary account.
d.	Revenues, expenses, and the dividends account are closed to the Income Summary account.

	66.	In order to close the dividends account, the
a.	income summary account should be debited.
b.	income summary account should be credited.
c.	retained earnings account should be credited.
d.	retained earnings account should be debited.

	67.	In preparing closing entries
a.	each revenue account will be credited.
b.	each expense account will be credited.
c.	the retained earnings account will be debited if there is net income for the period.
d.	the dividends account will be debited.

	69.	The closing entry process consists of closing
a.	all asset and liability accounts.
b.	out the retained earnings account.
c.	all permanent accounts.
d.	all temporary accounts.

	70.	The final closing entry to be journalized is typically the entry that closes the
a.	revenue accounts.
b.	dividends account.
c.	retained earnings account.
d.	expense accounts.

	73.	The balance in the income summary account before it is closed will be equal to
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.

	74.	After closing entries are posted, the balance in the retained earnings account in the ledger will be equal to
a.	the beginning retained earnings reported on the retained earnings statement.
b.	the amount of retained earnings reported on the balance sheet.
c.	zero.
d.	the net income for the period.

	88.	All of the following statements about the post-closing trial balance are correct except it
a.	shows that the accounting equation is in balance.
b.	provides evidence that the journalizing and posting of closing entries have been properly completed.
c.	contains only permanent accounts.
d.	proves that all transactions have been recorded.

	89.	A post-closing trial balance will show
a.	only permanent account balances.
b.	only temporary account balances.
c.	zero balances for all accounts.
d.	the amount of net income (or loss) for the period.

	90.	A post-closing trial balance should be prepared
a.	before closing entries are posted to the ledger accounts.
b.	after closing entries are posted to the ledger accounts.
c.	before adjusting entries are posted to the ledger accounts.
d.	only if an error in the accounts is detected.

	91.	A post-closing trial balance will show
a.	zero balances for all accounts.
b.	zero balances for balance sheet accounts.
c.	only balance sheet accounts.
d.	only income statement accounts.

	92.	The purpose of the post-closing trial balance is to
a.	prove that no mistakes were made.
b.	prove the equality of the balance sheet account balances that are carried forward into the next accounting period.
c.	prove the equality of the income statement account balances that are carried forward into the next accounting period.
d.	list all the balance sheet accounts in alphabetical order for easy reference.