Question 1

An entry to must be recorded at the end of the year.&#10;A)Transfer Net Income into the Owner's Capital account&#10;B)Transfer Net Income into the Checking account&#10;C)Close the adjusting entries for prepaid expenses&#10;D)Write a check to the owner for the amount of Net Income

Accepted Answer

At the end of the fiscal year, businesses must transfer their net income into the owner's capital account to reflect the increase in equity resulting from the year's profits. This is part of the closing process in accounting, which also includes closing temporary accounts to prepare for the next accounting period.

Question 2

To close income and expense accounts, you enter a closing date in QuickBooks Online.

Accepted Answer

In QuickBooks Online, you can close income and expense accounts by entering a closing date. This action creates closing entries that transfer the balances of these accounts to the retained earnings account.

Question 3

Reconciling a bank statement can help in finding the following types of errors recorded in the Checking account: .&#10;A)A transaction that was recorded twice&#10;B)A transaction that was recorded backwards&#10;C)Transposition errors&#10;D)All of these can be found with a reconciliation

Accepted Answer

Reconciling a bank statement involves comparing the bank's records with your own records of transactions to identify any discrepancies. This process can help in finding errors such as transactions recorded twice (duplicates), transactions recorded backwards (e.g., debits recorded as credits), and transposition errors (when numbers are swapped, e.g., $64 instead of $46). Therefore, all of these errors can be identified through reconciliation.

Question 4

Adjusting entries are prepared for .&#10;A)Prepaid Expenses&#10;B)Depreciation&#10;C)Drawing&#10;D)Both A and B

Accepted Answer

Adjusting entries are prepared for items like Prepaid Expenses and Depreciation to allocate expenses and revenues to the appropriate periods, but not for Drawings, which are distributions to owners.

Question 5

When an owner works in a business, payment for services is made by .&#10;A)Creating a Paycheck&#10;B)An Owner Withdrawal&#10;C)A contribution to a Special Fund&#10;D)Adding the time as an investment in the business

Accepted Answer

When an owner works in their own business, the payment for their services is typically made through an owner withdrawal, also known as a draw. This is because the owner is not an employee of the business but rather the proprietor, and thus they do not receive a traditional paycheck. Instead, they withdraw funds from the business earnings for personal use.

Question 6

QuickBooks Online uses the cash-basis of accounting by default.

Accepted Answer

QuickBooks Online uses the accrual basis of accounting by default, but it can be changed to cash basis in the report settings.

Question 7

Additional investments in the business may be cash or non-cash investments.

Accepted Answer

Additional investments in a business can include both cash investments, such as injecting more money into the business, and non-cash investments, such as contributing assets like equipment, inventory, or intellectual property.

Question 8

When the Checking account and the bank account are reconciled, are recorded into the Checking account.&#10;A)Service Charges&#10;B)Automatic Payments&#10;C)Interest Earned on the account&#10;D)All the above

Accepted Answer

When reconciling a checking account with the bank statement, all adjustments such as service charges, automatic payments, and interest earned on the account are recorded in the checking account to reflect the actual available balance.

Question 9

There are three tabs available on the Reconcile Checking window: Receipts, Disbursements, and All.

Accepted Answer

The Reconcile Checking window typically includes two main tabs: Deposits and Other Credits (or Receipts) and Checks and Payments (or Disbursements), not an "All" tab.

Question 10

QuickBooks Online automatically transfers Net Income into Retained Earnings at the end of the year.

Accepted Answer

QuickBooks Online automatically transfers Net Income into Retained Earnings at the end of the year as part of the closing process for the accounting period.

Deck 5: General Accounting and End-Of-Period Procedures