Question 1

Match the terms with the definitions.
-A temporary account used in the closing process to summarize the effects of all revenue and expense accounts.

Accepted Answer

The Income Summary account is a temporary account used during the closing process to summarize the effects of all revenue and expense accounts, facilitating the transfer of their balances to the Retained Earnings account.

Question 2

Match the terms with the definitions.
-Obligations that are due within either one year or the normal operating cycle of the business,whichever is longer,and that are to be paid out of current assets.

Accepted Answer

Current liabilities are obligations due within one year or the operating cycle of the business, whichever is longer, and are to be paid with current assets.

Question 3

Match the terms with the definitions.
-Accounts that accumulate information across accounting periods; all accounts reported on the balance sheet.

Accepted Answer

Permanent accounts are those that accumulate information across accounting periods and include all accounts reported on the balance sheet. These accounts are not closed at the end of the accounting period but carry their balances into the next period.

Question 4

Match the terms with the definitions.
-Accounts that do not accumulate information across accounting periods but are closed,such as the drawing account and all income statement accounts.

Accepted Answer

Temporary accounts do not accumulate information across accounting periods but are closed at the end of each period, which includes the drawing account and all income statement accounts.

Question 5

Match the terms with the definitions.
-Obligations that are not expected to be paid within a year and do not require the use of current assets.

Accepted Answer

Long-term liabilities are obligations that a company expects to pay after one year or more, and they do not require the immediate use of current assets. This contrasts with current liabilities, which are due within a year. Examples of long-term liabilities include bonds payable, long-term loans, and lease obligations.

Question 6

Match the terms with the definitions.
-Cash and assets that will be converted into cash or consumed within either one year or the normal operating cycle of the business,whichever is longer.

Accepted Answer

The definition provided matches the term "current assets," which are assets expected to be converted into cash, sold, or consumed within a year or the operating cycle of the business, whichever is longer.

Question 7

Match the terms with the definitions.
-The steps involved in accounting for all of the business activities during an accounting period.

Accepted Answer

The accounting cycle refers to the steps involved in accounting for all of the business activities during an accounting period.

Question 8

Match the terms with the definitions.
-Assets that are expected to serve the business for many years.

Accepted Answer

Property, plant, and equipment are assets that are expected to serve the business for many years, as they include long-term physical assets like buildings, machinery, and vehicles.

Question 9

Match the terms with the definitions.
-The process of giving zero balances to the temporary accounts so that they can accumulate information for the next accounting period.

Accepted Answer

The closing process involves giving zero balances to temporary accounts to prepare them for the next accounting period.

Question 10

Match the terms with the definitions.
-A balance sheet in which the liabilities and the owner's equity sections are shown below the assets section.

Accepted Answer

The report form of balance sheet is characterized by presenting the liabilities and the owner's equity sections below the assets section, in a vertical format.

Quiz 6: Financial Statements and the Closing Process

Match the terms with the definitions. -A temporary account used in the closing process to summarize the effects of all revenue and expense accounts.

Match the terms with the definitions. -Obligations that are due within either one year or the normal operating cycle of the business,whichever is longer,and that are to be paid out of current assets.

Match the terms with the definitions. -Accounts that accumulate information across accounting periods; all accounts reported on the balance sheet.

Match the terms with the definitions. -Accounts that do not accumulate information across accounting periods but are closed,such as the drawing account and all income statement accounts.

Match the terms with the definitions. -Obligations that are not expected to be paid within a year and do not require the use of current assets.

Match the terms with the definitions. -Cash and assets that will be converted into cash or consumed within either one year or the normal operating cycle of the business,whichever is longer.

Match the terms with the definitions. -The steps involved in accounting for all of the business activities during an accounting period.

Match the terms with the definitions. -Assets that are expected to serve the business for many years.

Match the terms with the definitions. -The process of giving zero balances to the temporary accounts so that they can accumulate information for the next accounting period.

Match the terms with the definitions. -A balance sheet in which the liabilities and the owner's equity sections are shown below the assets section.