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Accounting 1094

This document contains multiple choice questions about accounting concepts related to closing entries. Closing entries are journal entries made at the end of an accounting period to clear temporary accounts and transfer their balances to permanent accounts. Failure to make closing entries would misstate retained earnings on the balance sheet. The income summary account is credited in the closing entry that closes net income for the period. After closing entries, the income summary account balance would be the only temporary account with a non-zero balance.

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44 views3 pages

Accounting 1094

This document contains multiple choice questions about accounting concepts related to closing entries. Closing entries are journal entries made at the end of an accounting period to clear temporary accounts and transfer their balances to permanent accounts. Failure to make closing entries would misstate retained earnings on the balance sheet. The income summary account is credited in the closing entry that closes net income for the period. After closing entries, the income summary account balance would be the only temporary account with a non-zero balance.

Uploaded by

Kristy Veyna Bautista
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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53.

Failure to prepare closing entries will produce a misstated

A. total liabilities figure on the balance sheet.


B. total assets figure on the balance sheet.
C. Retained Earnings account balance.
D. Income Summary account balance.

54. Which of the following could not possibly be a closing entry?

A. Debit Income Summary and credit Retained Earnings


B. Debit Income Summary and credit Dividends
C. Debit Retained Earnings and credit Dividends
D. Debit Retained Earnings and credit Income Summary

55. The Income Summary account is credited in the entry that closes

A. the dividends account.


B. expense accounts.
C. net income.
D. revenue accounts.

56. After all closing entries have been posted, which of the following accounts is most likely to
have a nonzero balance?

A. Interest Expense
B. Unearned Revenue
C. Service Revenue
D. Income Summary

This study source was downloaded by 100000853225706 from CourseHero.com on 11-15-2022 17:39:06 GMT -06:00

https://www.coursehero.com/file/13008173/ACCOUNTING-1094/
57. Which of the following accounts is not found in closing entries?

A. Accumulated Depreciation–Equipment
B. Retained Earnings
C. Income Summary
D. Dividends

58. Under which circumstance would one less closing entry than usual be made?

A. When a net loss has been suffered


B. When dividends are equal to net income for the period
C. When net income is zero
D. When the Retained Earnings account is zero prior to posting of closing entries

This study source was downloaded by 100000853225706 from CourseHero.com on 11-15-2022 17:39:06 GMT -06:00

https://www.coursehero.com/file/13008173/ACCOUNTING-1094/
59. The Retained Earnings, Dividends, and Income Summary accounts for Harmon Repair
Company for the accounting period are presented below in T account form after the recording
and posting of closing entries:

Retained Earnings Dividends


12/31 300 1/1 1,500 3/1 100 12/31 400
12/31 400 6/1 100
9/1 100
12/31 100

Income Summary
12/31 900 12/31 600
12/31 300

The total amount of revenue earned for the period is

A. $300.
B. $600.
C. $700.
D. $900.

This study source was downloaded by 100000853225706 from CourseHero.com on 11-15-2022 17:39:06 GMT -06:00

https://www.coursehero.com/file/13008173/ACCOUNTING-1094/
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