Question 1

QuickBooks Online follows the same closing process as manual accounting.

Accepted Answer

QuickBooks Online automates many aspects of the closing process, unlike manual accounting which requires more manual steps and adjustments.

Question 2

The report that proves that Assets = Liabilities + Equity is the report.&#10;A)Profit and Loss&#10;B)Statement of Cash Flows&#10;C)Balance Sheet&#10;D)Trial Balance

Accepted Answer

The Balance Sheet is the financial statement that demonstrates the accounting equation: Assets = Liabilities + Equity.

Question 3

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

Accepted Answer

In QuickBooks Online, you can set a closing date to protect your financial data, prevent accidental changes to closed transactions, and ensure that your reports reflect accurate financial information. When you close your books for a period, QuickBooks automatically posts adjusting entries to your income and expense accounts and moves their balances to your retained earnings account. This process ensures that your income statement's net income or loss is properly closed out and transferred to your balance sheet's equity section.

Question 4

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

Accepted Answer

Additional investments in a business can be made in the form of cash or non-cash assets, such as property or equipment.

Question 5

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 year, the net income (or loss) needs to be transferred to the owner's capital account, as it represents the owner's share of the company's profits. This is done through a closing entry, which typically debits the income summary account (where all revenues and expenses are temporarily recorded) and credits the owner's capital account. Options B, C, and D are not necessary at the end of the year and do not account for the transfer of net income to the owner's capital account.

Question 6

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

Accepted Answer

QuickBooks Online automatically transfers the net income from the Income Statement into Retained Earnings on the Balance Sheet at the end of the fiscal year.

Question 7

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 prepaid expenses and depreciation to ensure that expenses are matched with revenues in the correct accounting period. Adjusting entries are not prepared for drawings; instead, they are recorded directly in the owner's equity account.

Question 8

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 9

When an owner works in a business, payment for the work 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

An Owner Withdrawal is the payment made to an owner for work performed in the business.

Question 10

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 of the above

Accepted Answer

All of the mentioned items (service charges, automatic payments, and interest earned) are typically recorded into the checking account during the reconciliation process to ensure the account balance matches the bank statement.

Deck 5: End-Of-Period Procedures Including Adjusting Entries, Owner Withdrawals and Investments, and Closing Entries