Deck 5: The Accounting Cycle Completed

Question 1

Samantha's Design Studio showed office supplies available of $800.A count of the supplies left on hand as of June 30 was $500.The adjusting journal entry is:

A) $$\begin{array}{l}\begin{array} { | l | l | } \hline\text { Office Supplies }\ & 300 \\\hline \text { Office Supplies Expense } & 300 \\\hline\end{array}\end{array}$$
B) $$\begin{array}{l}\begin{array} { | l | l | } \hline\text { Office Supplies Expense }\ & 500 \\\hline \text {Office Supplies } & 500 \\\hline\end{array}\end{array}$$
C) $$\begin{array}{l}\begin{array} { | l | l | } \text { Office Supplies }\ & 500 \\\hline \text { Office Supplies Expense } & 500 \\\hline\end{array}\end{array}$$
D) $$\begin{array}{l}\\\begin{array} { | r | r | } \hline\text { Office Supplies Expense } & 300 \\\hline \text { Office Supplies } & 300 \\\hline\end{array}\end{array}$$

Answer 1

$$\begin{array}{l}\\\begin{array} { | r | r | } \hline\text { Office Supplies Expense } & 300 \\\hline \text { Office Supplies } & 300 \\\hline\end{array}\end{array}$$

Question 2

The ending balances in the ledger after posting the adjusting entries,will be the same amounts that are found on the worksheet in the adjusted trial balance column.

Answer 2

True

Question 3

The adjusting entry for accrued salaries is to:

A)debit Salaries Expense; credit Salaries Payable.
B)debit Salaries Expense; credit Cash.
C)debit Salaries Payable; credit Salaries Expense.
D)debit Cash; credit Salaries Expense.

Answer 3

A

Question 4

Question 5

Question 6

Tina's Event Planning bought a computer worth $3,500 with an expected life of 5 years and a residual value of $750.What is the adjusting journal entry after the first year?

A)
$$\begin{array} { | c | l | } \hline \text { Computer } & 550 \\\hline \text { Depreciation Expense } & 550 \\\hline\end{array}$$
B) $$\begin{array} { | c | l | } \hline \text { Computer } & 550 \\\hline \text { Accumulated Depreciation, Computer } & 550 \\\hline\end{array}$$
C) $$\begin{array} { | c | l | } \hline \text { Depreciation Expense } & 550 \\\hline \text { Accumulated Depreciation, Computer } & 550 \\\hline\end{array}$$
D)
$$\begin{array} { | c | l | } \hline \text {Depreciation Expense} & 550 \\\hline \text { Computer} & 550 \\\hline\end{array}$$

Question 7

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

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 8

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:

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

Question 9

Adjusting journal entries:

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 closing entries are prepared.
D)must be journalized and posted.

Question 10

Tim's Electrical Service purchased tools for $4,000.They have an expected life of 20 months and no residual value.The adjusting journal entry for the month is:

A) $$\begin{array} { | l | l | } \hline \text { Depreciation Expense } & 200 \\\hline \text { Equipment } & 200 \\\hline\end{array}$$
B) $$\begin{array} { | c | l | } \hline \text { Depreciation Expense } & 200 \\\hline \text { Accumulated Depreciation } & 200 \\\hline\end{array}$$
C) $$\begin{array} { | c | l | } \hline \text { Accumulated Depreciation } & 200 \\\hline \text { Depreciation Expense } & 200 \\\hline\end{array}$$
D) $$\begin{array} { | l | l | } \hline \text { Accumulated Depreciation } & 200 \\\hline { \text { Equipment } }&200 \\\hline\end{array}$$

Question 11

Mark's Tree Service depreciation for the month is $600.The adjusting journal entry is:

A) $\begin{array}{|l|lcc|}\hline \text {Equipment } & 600 \\\hline\quad\quad\quad \quad\quad\text { Accumulated Depreciation } &\quad\quad\quad\quad\quad\quad600\\\hline \end{array}$

B) $$\begin{array} { | c | l | } \hline \text { Depreciation Expense } & 600 \\\hline \text { Accumulated Depreciation } & 600 \\\hline\end{array}$$
C) $$\begin{array} { | l | l | } \hline \text { Depreciation Expense } & 600 \\\hline \text { Equipment } & 600 \\\hline\end{array}$$
D) $$\begin{array} { | c | l | } \hline \text { Accumulated Depreciation } & 600 \\\hline \text { Depreciation Expense } & 600 \\\hline\end{array}$$

Question 12

Question 13

Question 14

Income Summary:

A)is a temporary account.
B)is a permanent account.
C)summarizes revenue and expenses and transfers the balance to Capital.
D)Both A and C are correct.

Question 15

Question 16

Question 17

Question 18

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:

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 19

Each adjustment affects:

A)the income statement.
B)the balance sheet.
C)the cash account.
D)Both A and B are correct.

Question 20

The adjusting entry to record depreciation for the company automobile would be:

A)debit Accumulated Depreciation,Automobile; credit Depreciation Expense,Automobile.
B)debit Accumulated Depreciation,Automobile; credit Automobile.
C)debit Depreciation Expense,Automobile; credit Accumulated Depreciation,Automobile.
D)debit Depreciation Expense,Automobile; credit Automobile.

Question 21

To close the Fees Earned account:

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

Question 22

Which of the following accounts would not be considered a permanent account?

A)Accounts Receivable
B)Salaries Expense
C)Accounts Payable
D)Office Supplies

Question 23

To close the Withdrawals account:

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

Question 24

All permanent accounts can be found:

A)on the Income Statement.
B)on the Statement of Owner's Equity.
C)on the Balance Sheet.
D)Permanent accounts do not appear on the financial statements.

Question 25

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

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 26

Accounts in which the balances are carried over from one accounting period to the next are called:

A)real accounts.
B)nominal accounts.
C)temporary accounts.
D)zero accounts.

Question 27

Which of the following columns of the worksheet are referred to when preparing closing entries to the Income Summary?

A)Adjusted trial balance columns
B)Balance sheet columns
C)Adjustments columns
D)Income statement columns

Question 28

Which of the following accounts should not be closed to Income Summary at the end of the fiscal year?

A)Salaries Expense
B)Fees Earned
C)Utilities Expense
D)Withdrawals

Question 29

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

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

Question 30

After posting the closing entries,which of the following accounts is most likely not to have a zero balance?

A)Prepaid Insurance
B)Advertising Expense
C)J)Smith,Withdrawals
D)Medical Fees

Question 31

The correct order for closing accounts is:

A)revenue,expenses,income summary,withdrawals.
B)revenue,income summary,expenses,withdrawals.
C)revenue,expenses,capital,withdrawals.
D)revenue,capital,expenses,withdrawals.

Question 32

How do you close the expense accounts?

A)Debit Capital; credit the expense accounts
B)Credit Capital; debit the expense accounts
C)Credit Income Summary; debit the expense accounts
D)Debit Income Summary; credit the expense accounts

Question 33

When the balance in the Income Summary account is a credit,the company has:

A)incurred a net loss.
B)incurred a net income.
C)had more expenses than revenue.
D)made an error in their closing entries.

Question 34

Which of the following accounts is not a temporary account?

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

Question 35

Closing entries will affect:

A)total assets.
B)Cash.
C)Owner's Capital.
D)total liabilities.

Question 36

Which of the following accounts will be directly closed to Capital at the end of the fiscal year?

A)Salaries Expense
B)Fees Revenue
C)Withdrawals
D)Depreciation Expense

Question 37

When the balance in the Income Summary account is a debit,the company has:

A)incurred a net loss.
B)incurred a net income.
C)had more revenue than expenses.
D)made an error in their closing entries.

Question 38

An account in which the balance is not carried over from one accounting period to the next is called a:

A)permanent account.
B)real account.
C)temporary account.
D)zero account.

Question 39

Closing entries:

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.

Question 40

How do you close a revenue account?

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

Question 41

The business failed to close any of the revenue accounts.The result of this error is that:

A)revenues will be understated.
B)capital will be understated.
C)the assets will be overstated.
D)the liabilities will be overstated.

Question 42

Which of the following is a real account?

A)Cash
B)Fees Earned
C)Utilities Expense
D)Income Summary

Question 43

M.Smuts showed a net income of $6,000.The entry to close the Income Summary account would include a:

A)debit to M.Smuts Capital,$6,000.
B)credit to M.Smuts Capital,$6,000.
C)debit to Income Summary,$6,000.
D)Both B and C are correct.

Question 44

B.Benson's worksheet showed the revenue account,Rental Fees,$1,300.The journal entry to close the account is:

A) $\begin{array}{|l|lcc|}\hline \text { Rental Fees}\quad\quad\quad\quad &1,300\\ \hline\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Income Summary} &\quad\quad\quad\quad\quad\quad1,300\\\hline \end{array}$

B) $\begin{array}{|l|lcc|}\hline \text { Benson, Capital }\quad\quad\quad\quad &1,300\\ \hline\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text {Rental Fees} &\quad\quad\quad\quad\quad\quad1,300\\\hline \end{array}$

C) $\begin{array}{|l|lcc|}\hline \text { Rental Fees }\quad\quad\quad\quad &1,300\\ \hline\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Benson, Capital } &\quad\quad\quad\quad\quad\quad1,300\\\hline \end{array}$

D) $\begin{array}{|l|lcc|}\hline \text { Income Summary}\quad\quad\quad\quad &1,300 \\ \hline\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Rental Fees} &\quad\quad\quad\quad\quad\quad1,300\\\hline \end{array}$

Question 45

The following normal account balances were found on the general ledger before closing entries were prepared: $$\begin{array} { | l | l | } \hline \text { Revenue } \$ 600 & \text { Cash } \$ 500 \\\hline \text { Expenses } \$ 400 & \text { Accounts Receivable } \$ 350 \\\hline \text { Capital } \$ 7,500 & \text { Withdrawals } \$ 1,000 \\\hline\end{array}$$ After closing entries are posted,what is the balance in the Cash account?

A)$800
B)$0
C)$300
D)Closing entries do not affect the Cash account.

Question 46

Closing entries will:

A)increase the Owner's Capital.
B)decrease the Owner's Capital balance.
C)either increase or decrease Owner's Capital.
D)not affect the Owner's Capital balance.

Question 47

After closing the revenue,expense,and withdrawal accounts,the capital increased by $2,000.Which of the following situations could have occurred?

A)The company had a net income.
B)The owner invested an additional amount.
C)The owner made a withdrawal.
D)All of these answers are correct.

Question 48

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?

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

Question 49

The entry to close the expense account(s)was entered in reverse-Income Summary was credited and the expense account(s)was/were debited.The result of this error is that:

A)before closing it,Income Summary will have a credit balance.
B)before closing it,Income Summary will have a debit balance.
C)the assets will be overstated.
D)the liabilities will be overstated.

Question 50

On Flex Company's worksheet the revenue account had a normal balance of $3,800.The entry to close the account would include a:

A)debit to Income Summary for $3,800.
B)credit to Income Summary for $3,800.
C)debit to Flex,Capital for $3,800.
D)credit to Revenue for $3,800.

Question 51

The balance in the J.Higgins,Withdrawals account was $4,200.The entry to close the account would include a:

A)debit to Income Summary,$4,200.
B)credit to Income Summary,$4,200.
C)debit to J.Higgins,Capital,$4,200.
D)debit to J.Higgins,Withdrawals,$4,200.

Question 52

The Rent Expense account had a normal balance of $1,100.The entry to close the account would include a:

A)debit to Rent Expense,$1,100.
B)debit to Income Summary,$1,100.
C)debit to Capital,$1,100.
D)credit to Income Summary,$1,100.

Question 53

The income statement credit column of the worksheet showed the following revenues: $$\begin{array} {| l | r |} \hline \text { Catering Fees } & \$ 500 \\\hline \text { Cleaning Fees } & 800 \\\hline\end{array}$$ The journal entry to close the revenue accounts is:

A) $\begin{array}{|l|lcc|} \hline\text { Income Summary } \quad\quad\quad&1,300 \\ \hline\quad\quad\quad\quad\quad\quad\text { Catering Fees } &\quad\quad\quad\quad\quad\quad500\\ \hline\quad\quad\quad\quad\quad\quad\text { Cleaning Fees } &\quad\quad\quad\quad\quad\quad800\\\hline \end{array}$

B) $\begin{array}{|l|r|}\hline \text { Catering Fees } & 500 \\\hline \text { Cleaning Fees } & 300 \\\hline\quad\quad\quad \text { Income Stummary } &\quad\quad\quad\quad1,300\\\hline \end{array}$
C) $\begin{array}{|l|lcc|}\hline \text { Capital } &1,300 \\\hline \text { Income Summary } &1,300\\\hline \end{array}$

D) $$\begin{array} { | l | l | } \hline \text { Catering Fees }\quad\quad\quad & 500 \\\hline \text { Cleaning Fees } & 800 \\\hline\quad\quad\quad\quad\quad\quad\quad { \text { Capital } } &\quad\quad\quad 1,300\\\hline\end{array}$$

Question 54

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

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 55

The following normal account balances were found on the general ledger before closing entries were prepared: $$\begin{array} { | l | l | } \hline \text { Revenue } \$ 800 & \text { Cash } \$ 500 \\\hline \text { Expenses } \$ 400 & \text { Accounts Receivable } \$ 350 \\\hline \text { Capital } \$ 7,500 & \text { Withdrawals } \$ 1,000 \\\hline\end{array}$$ After closing entries are posted,what is the balance in the Revenue account?

A)$800
B)$0
C)$300
D)Closing entries do not affect Revenue.

Question 56

The entry to close the revenue account(s)was entered in reverse-Income Summary was debited and the revenue account(s)was/were credited.The result of this error is that:

A)before closing it,Income Summary will have a credit balance.
B)before closing it,Income Summary will have a debit balance.
C)the assets will be overstated.
D)the liabilities will be overstated.

Question 57

The balance in the Rent Expense account on the worksheet was $120.The journal entry to close the Rent Expense account is:

A) $\begin{array}{|l|lcc|}\hline \text { Rent Expense}\quad\quad\quad\quad &120 \\ \hline\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Prepaid Rent} &\quad\quad\quad\quad\quad\quad120\\\hline \end{array}$

B) $\begin{array}{|l|lcc|}\hline \text { Rent Expense}\quad\quad\quad\quad &120 \\ \hline\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Income Summary } &\quad\quad\quad\quad\quad\quad120\\\hline \end{array}$

C) $$\begin{array} { | r | r | } \hline \text { Rent Expense }\quad\quad\quad\quad\quad\quad\quad\quad\quad & 120 \\\hline \text { Capital } &\quad\quad\quad\quad 120 \\\hline\end{array}$$
D) $\begin{array}{|l|lcc|}\hline \text { Income Summary}\quad\quad\quad\quad &120 \\ \hline\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\text { Rent Expense} &\quad\quad\quad\quad\quad\quad120\\\hline \end{array}$

Question 58

The entry to close the Withdrawal account was entered in reverse-the Withdrawal account was debited and Capital credited.The result of this error is that:

A)before closing it,Income Summary will have a credit balance.
B)before closing it,Income Summary will have a debit balance.
C)the end of period capital will be understated.
D)the end of period capital will be overstated.

Question 59

The entry to close Income Summary (net loss)was entered in reverse-Income Summary was debited and Capital was credited.This error will cause:

A)Income Summary to have a credit balance.
B)Income Summary to have a debit balance.
C)the assets to be overstated.
D)the liabilities to be overstated.

Question 60

The Income Summary account shows debits of $19,000 and credits of $10,000.This results in a:

A)net income of $29,000.
B)net loss of $29,000.
C)net income of $9,000.
D)net loss of $9,000.

Question 61

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)?

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

Question 62

The revenue accounts debited and the Income Summary account credited would be the result of:

A)closing the Income Summary account-there is a net income.
B)closing the Income Summary account-there is a net loss.
C)closing the revenue accounts.
D)closing the expense accounts.

Question 63

When closing the Income Summary account when there is a net income:

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

Question 64

The Withdrawals account is closed to the Owner's Capital account.

Question 65

The entry to close the Depreciation Expense account would cause:

A)the Capital account balance to increase.
B)the Capital account balance to decrease.
C)the Depreciation Expense account balance to decrease.
D)None of these are correct.

Question 66

When revenue is closed:

A)Owner's Capital will be debited.
B)Income Summary will be debited.
C)Income Summary will be credited.
D)None of these are correct.

Question 67

When the expenses are closed:

A)Owner's Capital will be debited.
B)Income Summary will be debited.
C)Income Summary will be credited.
D)None of these are correct.

Question 68

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

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 69

When closing the Income Summary account when there is a net loss:

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

Question 70

The entry to close the Fees Earned account would cause:

A)the Capital account balance to increase.
B)the Capital account balance to decrease.
C)the Fees Earned account to decrease.
D)None of these are correct.

Question 71

When closing the Withdrawal account:

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

Question 72

When Income Summary has a credit balance and the account is closed:

A)Capital is decreased.
B)Capital is increased.
C)Withdrawals is increased.
D)None of these are correct.

Question 73

There are 7 closing entries.

Question 74

The Withdrawals account is closed to Income Summary.

Question 75

The beginning capital balance is $5,350,there are no additional investments but the owner did withdraw $500 during the accounting period.The period's revenue is $5,000 and expenses total $6,500.What is the ending capital balance (after closing entries)?

A)$5,350
B)$2,850
C)$5,850
D)$3,350

Question 76

When the Withdrawals account is closed:

A)Owner's Capital will be debited.
B)Income Summary will be debited.
C)Income Summary will be credited.
D)None of these are correct.

Question 77

Which of the following is not a temporary account?

A)Wages Expense
B)Service Fees
C)Rent Expense
D)Capital

Question 78

Real accounts are those accounts with balances that are brought forward to the next accounting period.

Question 79

The Capital account debited and the withdrawals credited would be the result of:

A)closing the Income Summary account-there is a net income.
B)closing the withdrawal account.
C)closing the Income Summary account-there is a net loss.
D)closing the expense accounts.

Question 80

The Income Summary account debited and the expense accounts credited would be the result of:

A)closing the Income Summary account-there is a net income.
B)closing the revenue accounts.
C)closing the Income Summary accounts-there is a net loss.
D)closing the expense accounts.