Question 1

What are the major goals of the closing process?

Accepted Answer

The answer of What are the major goals of the...

Question 2

The trial balance prepared after all of the temporary accounts have been closed is called a post-closing trial balance.

Accepted Answer

A post-closing trial balance is prepared after all temporary accounts (revenues, expenses, dividends) have been closed to check the balance of permanent accounts and ensure that debits equal credits.

Question 3

Why will the Income Summary account never appear on a financial statement?

Accepted Answer

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Question 4

From the following items in the income statement columns of the worksheet of Brandy's Tutoring at December 31, prepare the closing entries without explanation, assuming that a $2,000 withdrawal was made during the period.

Accepted Answer

The answer of From the following items in the income...

Question 5

Determine the ending owner's equity of a business having a beginning owner's equity of $3,200, withdrawals of $2,000, and after closing the revenues and expenses Income Summary has a credit balance of $5,250.
$ ________

Accepted Answer

The answer of Determine the ending owner's equity of a...

Question 6

Identify whether the entries below are an adjusting entry (AE) or a closing entry (CE).
-________

Accepted Answer

The answer of Identify whether the entries below are an...

Question 7

Determine the beginning owner's equity of a business having an ending owner's equity of $6,000, withdrawals of $1,250, and after closing the revenues and expenses, the Income Summary account has a debit balance of $2,100.
$ ________

Accepted Answer

The answer of Determine the beginning owner's equity of a...

Question 8

The final step in the accounting cycle is:
A) preparing the post-closing trial balance.
B) preparing the financial statements.
C) posting the closing entries.
D) posting the adjusting entries.

Accepted Answer

The final step in the accounting cycle is preparing the post-closing trial balance. This step occurs after all closing entries have been made and is used to verify that debits equal credits after closing entries are posted, ensuring the ledger is balanced for the start of the new accounting period.

Question 9

Identify whether the entries below are an adjusting entry (AE) or a closing entry (CE).
-________

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The answer of Identify whether the entries below are an...

Question 10

Which of the following accounts would appear on the post-closing trial balance?
A) Fees Earned
B) Rent Expense
C) Accounts Receivable
D) Withdrawals

Accepted Answer

Accounts Receivable is a permanent account and appears on the post-closing trial balance, while the other options are temporary accounts that are closed at the end of the accounting period.

Question 11

In the first space below, indicate whether each account is a real or nominal account using (R) Real Account and (N) Nominal Account. In the second space below, indicate by an (X) if the account should be closed.

Accepted Answer

The answer of In the first space below, indicate whether...

Question 12

A summary of selected ledger accounts appears below for S. Ball for the current calendar year.  Answer the following questions.
1. What was the total amount of withdrawals for the year?
2. What was the net income?
3. What was the total revenue?
4. What were the total expenses?

Accepted Answer

The answer of A summary of selected ledger accounts appears...

Question 13

In the normal accounting cycle, the:
A) financial statements are prepared after the adjusting entries are posted.
B) financial statements are prepared before the adjusting entries are posted.
C) adjusting and closing entries are journalized before the financial statements are prepared.
D) post-closing trial balance is prepared before the closing entries are posted.

Accepted Answer

Financial statements are prepared after the adjusting entries are posted to ensure that all revenues and expenses are accurately recorded and reflected in the financial statements.

Question 14

In the first space below, indicate whether each account is a real or nominal account using (R) Real Account and (N) Nominal Account. In the second space below, indicate by an (X) if the account should be closed.

Accepted Answer

The answer of In the first space below, indicate whether...

Question 15

After closing the revenue and expense accounts, Income Summary showed a debit balance of $1,900. Which of the following statements is true?
A) The company had a net loss of $1,900.
B) The company had a net income of $1,900.
C) The company's cash increased $1,900.
D) The Capital account increased $1,900.

Accepted Answer

A debit balance in the Income Summary account indicates that expenses exceeded revenues, resulting in a net loss of $1,900.

Question 16

On the basis of the following data taken from the adjusted trial balance columns of the worksheet for the year ended December 31 for Painting the Perfect Picture, journalize the four closing entries in the proper order.

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Question 17

Of the following accounts, which might appear in the adjusted trial balance, but not in the post-closing trial balance?
A) Salary Expense
B) Owner's Capital
C) Accounts Payable
D) Income Summary

Accepted Answer

Income Summary is a temporary account that is used to close out all revenue and expense accounts at the end of the accounting period. It is not included in the post-closing trial balance because it has a zero balance after closing entries are posted.

Question 18

From the following items in the income statement columns of the worksheet of Monaghan Company at December 31, prepare the closing entries without explanation, assuming that a $500 withdrawal was made during the period.

Accepted Answer

The answer of From the following items in the income...

Question 19

Which of the following sequence of actions describes the proper order in the accounting cycle?
A) Journalize, post, close, prepare financial statements, adjust, and analyze transactions
B) Prepare financial statements, journalize, post, adjust, analyze transactions, close
C) Analyze transactions, journalize, post, adjust, prepare financial statements, close
D) Post, close, prepare financial statements, adjust, analyze transactions, and journalize

Accepted Answer

The correct sequence in the accounting cycle starts with analyzing transactions to understand their financial impact. Next, these transactions are journalized (recorded in the journal). The entries are then posted to the ledger. Adjustments are made to account for accruals, deferrals, and other financial events not captured at the time of initial recording. After adjustments, financial statements are prepared to provide a comprehensive view of the financial position and performance. Finally, temporary accounts are closed to prepare the books for the next accounting period.

Question 20

Determine the beginning assets of a business having ending liabilities of $4,000, the liabilities decreased by $1,500 during the year, an ending owner's equity of $10,700, additional investments of $2,000, withdrawals of $15,600, and after closing the revenues and expenses the Income Summary account has a credit balance of $6,800.
$ ________

Accepted Answer

The answer of Determine the beginning assets of a business...

Quiz 5: The Accounting Cycle Completed

What are the major goals of the closing process?

The trial balance prepared after all of the temporary accounts have been closed is called a post-closing trial balance.

Why will the Income Summary account never appear on a financial statement?

From the following items in the income statement columns of the worksheet of Brandy's Tutoring at December 31, prepare the closing entries without explanation, assuming that a $2,000 withdrawal was made during the period.

Determine the ending owner's equity of a business having a beginning owner's equity of $3,200, withdrawals of $2,000, and after closing the revenues and expenses Income Summary has a credit balance of $5,250. $ ________

Identify whether the entries below are an adjusting entry (AE) or a closing entry (CE). -________

Determine the beginning owner's equity of a business having an ending owner's equity of $6,000, withdrawals of $1,250, and after closing the revenues and expenses, the Income Summary account has a debit balance of $2,100. $ ________

The final step in the accounting cycle is:

Identify whether the entries below are an adjusting entry (AE) or a closing entry (CE). -________

Which of the following accounts would appear on the post-closing trial balance?

In the first space below, indicate whether each account is a real or nominal account using (R) Real Account and (N) Nominal Account. In the second space below, indicate by an (X) if the account should be closed.

A summary of selected ledger accounts appears below for S. Ball for the current calendar year. Answer the following questions. 1. What was the total amount of withdrawals for the year? 2. What was the net income? 3. What was the total revenue? 4. What were the total expenses?

In the normal accounting cycle, the:

In the first space below, indicate whether each account is a real or nominal account using (R) Real Account and (N) Nominal Account. In the second space below, indicate by an (X) if the account should be closed.

After closing the revenue and expense accounts, Income Summary showed a debit balance of $1,900. Which of the following statements is true?

On the basis of the following data taken from the adjusted trial balance columns of the worksheet for the year ended December 31 for Painting the Perfect Picture, journalize the four closing entries in the proper order.

Of the following accounts, which might appear in the adjusted trial balance, but not in the post-closing trial balance?

From the following items in the income statement columns of the worksheet of Monaghan Company at December 31, prepare the closing entries without explanation, assuming that a $500 withdrawal was made during the period.

Which of the following sequence of actions describes the proper order in the accounting cycle?