Question 1

A d_________________ is a distribution of cash by a company to its shareholders.

Accepted Answer

The answer of A d_________________ is a distribution of cash...

Question 2

After the closing entries have been posted,the t_______________ accounts will have zero balances.

Accepted Answer

The answer of After the closing entries have been posted,the...

Question 3

The financial statements of sole proprietorships,partnerships and companies are essentially the same except for transactions that directly affect e____________ accounts.

Accepted Answer

The answer of The financial statements of sole proprietorships,partnerships and...

Question 4

When closing the accounts of a partnership it is true that:

Accepted Answer

When closing the accounts of a partnership, profit is credited to each partner's capital account according to the profit-sharing agreement. This is because partners share the profits and losses of the business according to their agreement. Option A is not true because partner's salaries are not considered as drawings; they are treated as an expense of the business. Option B is incorrect because a profit and loss summary account is used to summarize the profits and losses of the business during the accounting period, whereas a retained profits account is used to record the accumulated profits of the business. Option D is not correct because a loss for the period is shared among the partners according to their profit-sharing agreement and is reflected in their capital accounts.

Question 5

The accounting entries made to close the temporary accounts are called ___________________ entries.

Accepted Answer

The answer of The accounting entries made to close the...

Question 6

The statement relating to reversing entries that is correct is:

Accepted Answer

While reversing entries can be helpful in some situations, there are alternative ways of dealing with accruals in subsequent periods without using reversing entries. For example, adjusting entries could be made in the subsequent period to reverse the effects of the initial accrual entry. Additionally, reversing entries are not appropriate for deferral type entries, as these types of entries do not involve accruals that would require reversal. Finally, depreciation is not typically an adjustment that requires reversing in the subsequent period, as it is a systematic allocation of the cost of a depreciable asset over its useful life rather than an accrual that needs to be reversed.

Question 7

The post closing trial balance contains only:

Accepted Answer

The post-closing trial balance is prepared after closing entries are made, which means all temporary accounts such as revenue, expenses, and dividends are closed out to the retained earnings account. Therefore, the only accounts remaining on the post-closing trial balance are balance sheet accounts, including assets, liabilities, and equity accounts.

Question 8

Monthly financial statements prepared during the year are called i________________ statements.

Accepted Answer

The answer of Monthly financial statements prepared during the year...

Question 9

In the closing process the balances of the income and expense accounts are closed off to the _______ and _____ summary account.

Accepted Answer

The answer of In the closing process the balances of...

Question 10

If expenses exceed income,before it is closed,the Profit and Loss Summary account will have a debit/credit balance.

Accepted Answer

The answer of If expenses exceed income,before it is closed,the...

Question 11

The retained profits balance of Go Company was $50 000 on the first day of the year.Profit during the year was $20 000.Near year-end a $10 000 dividend was declared that is to be paid in the following year.Year-end retained profits are:

Accepted Answer

The retained profits balance at the end of the year is calculated as:
Retained Profits (Start of Year) + Profit during the year - Dividend declared = Retained Profits (End of Year)

Plugging in the given values:
$50,000 + $20,000 - $10,000 = $60,000

Therefore, the answer is B) $60,000.

Question 12

R__________________ entries are made on the first day of the next financial year to undo the effects of certain adjusting entries.

Accepted Answer

The answer of R__________________ entries are made on the first...

Question 13

The statement relating to reversing entries that is correct is:

Accepted Answer

Reversing entries are made to reverse the effects of certain adjusting entries that were made in the previous accounting period. This makes the accounting process for the current period easier and more accurate. Reversing entries do not reverse the effect of credit transactions, errors, or closing entries.

Question 14

The major purpose of a post-closing trial balance is to:

Accepted Answer

The major purpose of a post-closing trial balance is to test for equality of debits and credits in the general ledger to ensure the opening position is correct for the next period. It confirms that all temporary accounts have been closed and their balances have been transferred to the retained earnings account. Option A is incorrect as the worksheet calculations have already been verified before closing the books. Option B is incorrect as all adjusting entries should have been made before preparing the post-closing trial balance. Option D is incorrect as the objective of the post-closing trial balance is not to compare pre and post-closing balances, but to ensure that all accounts have been closed and the opening position is correct.

Question 15

Dividends require two accounting entries,one when the dividend is declared and another when it is paid.What is the correct entry to record the declaration of a cash dividend of 20c a share calculated on 100 000 shares?

Accepted Answer

When a dividend is declared, retained earnings are reduced, and a liability (dividend payable) is created.

Question 16

The post-closing trial balance should contain only b____________ s________ accounts.

Accepted Answer

The answer of The post-closing trial balance should contain only...

Question 17

In a company balance sheet equity is separated into two main categories:

Accepted Answer

Equity in a company balance sheet is usually divided into two categories, Share capital and Retained profits. Share capital refers to the amount of money that has been invested in the company by its shareholders in the form of shares, while retained profits represent the accumulated profits that have not been distributed to shareholders in the form of dividends. Reserves and investments are not directly categorized under equity in a balance sheet, although they may be disclosed separately as part of the notes to the financial statements.

Question 18

The statement relating to the Profit and Loss Summary Account that is incorrect is:

Accepted Answer

The Profit and Loss Summary Account is a temporary account that is used to summarize the balances in the income and expense accounts for a specific accounting period. At the end of the period, the balance in the Profit and Loss Summary Account is transferred to the owner's Capital account or retained earnings account, and the account is closed. Therefore, option D stating that the Profit and Loss Summary Account is a permanent account is incorrect.

Question 19

Balance sheet accounts are known as permanent accounts and income statement accounts are known as t________________ accounts.

Accepted Answer

The answer of Balance sheet accounts are known as permanent...

Question 20

On 1 January Y Company Pty Ltd issued 100 000 shares for $2 each.The correct entry to record this transaction is:

Accepted Answer

When a company issues shares, it receives money in exchange for the ownership of those shares. This money is recorded as share capital, which is a component of shareholder's equity. In this case, Y Company Pty Ltd issued 100,000 shares for $2 each, resulting in total cash receipts of $200,000. Therefore, the correct entry to record this transaction would be to debit bank $200,000 and credit share capital $200,000. Option B is the only choice that accurately reflects this.

Quiz 5: Completing the Accounting Cycle

A d_________________ is a distribution of cash by a company to its shareholders.

After the closing entries have been posted,the t_______________ accounts will have zero balances.

The financial statements of sole proprietorships,partnerships and companies are essentially the same except for transactions that directly affect e____________ accounts.

When closing the accounts of a partnership it is true that:

The accounting entries made to close the temporary accounts are called ___________________ entries.

The statement relating to reversing entries that is correct is:

The post closing trial balance contains only:

Monthly financial statements prepared during the year are called i________________ statements.

In the closing process the balances of the income and expense accounts are closed off to the ___ and _ summary account.

If expenses exceed income,before it is closed,the Profit and Loss Summary account will have a debit/credit balance.

The retained profits balance of Go Company was $50 000 on the first day of the year.Profit during the year was $20 000.Near year-end a $10 000 dividend was declared that is to be paid in the following year.Year-end retained profits are:

R__________________ entries are made on the first day of the next financial year to undo the effects of certain adjusting entries.

The statement relating to reversing entries that is correct is:

The major purpose of a post-closing trial balance is to:

Dividends require two accounting entries,one when the dividend is declared and another when it is paid.What is the correct entry to record the declaration of a cash dividend of 20c a share calculated on 100 000 shares?

The post-closing trial balance should contain only b____ s accounts.

In a company balance sheet equity is separated into two main categories:

The statement relating to the Profit and Loss Summary Account that is incorrect is:

Balance sheet accounts are known as permanent accounts and income statement accounts are known as t________________ accounts.

On 1 January Y Company Pty Ltd issued 100 000 shares for $2 each.The correct entry to record this transaction is: