Question 1

The closing entry for expenses includes:

Accepted Answer

The closing entry for expenses involves transferring the balance of all expense accounts to Retained Earnings. This is done by debiting Retained Earnings and crediting all expense accounts. Dividends and Revenues are not involved in this process.

Question 2

Consider the following items: Land
Accounts Receivable
Notes Payable (due in three years)
Accounts Payable
Retained Earnings
Prepaid Rent
Unearned Revenue
Buildings
Notes Payable (due in six months)
Equipment
How many of the items listed above are generally long-term assets?

Accepted Answer

Long-term assets typically include Land, Buildings, and Equipment. These are assets that are expected to provide economic benefits over a period longer than one year.

Question 3

In the first three years of operations,Lindsey Corporation earned net income/loss of -$150,000,$100,000,and $250,000.At the end of the third year,Lindsey Corporation has a balance of $120,000 in its Retained Earnings account.What is the total amount of dividends Lindsey Corporation paid over the three years?

Accepted Answer

The answer of In the first three years of operations,Lindsey...

Question 4

The primary purpose of closing entries is to:

Accepted Answer

The primary purpose of closing entries is to update the balance of Retained Earnings and prepare revenue, expense, and dividend accounts for next period's transactions. This is accomplished by transferring the balances of revenue and expense accounts into the Retained Earnings account, and closing out the Dividends account. This process prepares the accounts for the upcoming period and ensures that the correct amounts are reflected in the financial statements.

Question 5

The following financial information is from Shovels Construction Company:  What is the amount of current assets,assuming the accounts above reflect normal activity?

Accepted Answer

The answer of The following financial information is from Shovels...

Question 6

Permanent accounts would not include:

Accepted Answer

Permanent accounts, also known as real accounts, are accounts that are not closed at the end of an accounting period. Instead, their balances are carried forward to the next period. Examples of permanent accounts include assets, liabilities, and equity accounts. Interest Expense is a temporary account that is closed at the end of the accounting period, therefore it is not a permanent account. Salaries Payable, Prepaid Rent, and Unearned Revenues are all examples of permanent accounts.

Question 7

Which of the following is true concerning temporary and permanent accounts?

Accepted Answer

Permanent accounts, such as assets, liabilities, and equity, represent activity over the entire life of the company, while temporary accounts, such as revenue, expenses, and dividends, represent activity for a specific period and are closed at the end of each reporting period. Cash can be either a permanent or temporary account depending on its use. The statement in option D is incorrect as temporary accounts only represent activity for the current reporting period.

Question 8

For the first three years of operations,the company reports net income of $1,000,$2,000,and $3,000,and pays dividends of $500,$1,000,and $1,000.What is the balance of retained earnings at the end of the third year?

Accepted Answer

The balance of retained earnings can be calculated by adding the net income and subtracting the dividends for each year. 
Year 1: Retained earnings = $1,000 - $500 = $500 
Year 2: Retained earnings = ($1,000 + $500) - $1,000 = $500 
Year 3: Retained earnings = ($3,000 + $500 + $500) - $1,000 = $3,000 
Therefore, the balance of retained earnings at the end of the third year is $3,500 (Option C).

Question 9

The purpose of closing entries is to transfer:

Accepted Answer

The purpose of closing entries is to transfer balances in temporary accounts (revenue, expense, and dividend accounts) to a permanent account (usually Retained Earnings). This is done to reset the temporary accounts to zero for the new accounting period and to capture the net income/loss for the period in the permanent account. The other options listed do not accurately describe the purpose of closing entries.

Question 10

When a company prepares closing entries,which one of the following is NOT a correct closing entry?

Accepted Answer

The answer of When a company prepares closing entries,which one...

Question 11

The following table contains financial information for Fisher Inc.before closing entries:  How many of the above accounts are permanent?

Accepted Answer

The answer of The following table contains financial information for...

Question 12

The ending balance of Retained Earnings can best be described as:

Accepted Answer

Retained earnings is the accumulated amount of net income of a company that has not been paid to its owners in the form of dividends. it is the amount of earnings that has been "retained" by the company for reinvestment in the business. Therefore, choice B is the correct answer.

Question 13

The following financial information is from Bronco Company.All debt is due within one year unless stated otherwise.  What is the amount of current liabilities?

Accepted Answer

The answer of The following financial information is from Bronco...

Question 14

The following table contains financial information for Trumpeter Inc.before closing entries:  What is the amount of Trumpeter's total assets?

Accepted Answer

The answer of The following table contains financial information for...

Question 15

Resources owned by the company that will provide a benefit for more than one year are called:

Accepted Answer

Long-term assets are resources that will provide a benefit for more than one year. Current assets are resources that are expected to be used up or turned into cash within one year, and current liabilities are debts that are expected to be paid within one year. Revenues are the amounts earned from the sale of goods and services, and do not necessarily represent resources owned by the company.

Question 16

Which of the following is a permanent account?

Accepted Answer

Retained Earnings is a permanent account because it represents the cumulative balance of profits and losses over the life of the company, and it carries over from year to year. Dividends, Service Revenue, and Advertising Expense are all temporary accounts because their balances are reset to zero at the end of each accounting period.

Question 17

The following table contains financial information for Trumpter's Inc.before closing entries:  What is the amount of Trumpter's total stockholders' equity?

Accepted Answer

The answer of The following table contains financial information for...

Question 18

The following table contains financial information for Trumpeter Inc.before closing entries:  What is Trumpeter's net income?

Accepted Answer

To calculate Trumpeter's net income, we need to subtract total expenses from total revenues. 
Total revenues = $24,000 + $900 = $24,900 
Total expenses = $14,000 
Net income = Total revenues - Total expenses = $24,900 - $14,000 = $10,900 
Therefore, the correct answer is D) $5,500.

Question 19

The following table contains financial information for Trumpter's Inc.before closing entries:  What is the amount of Trumpter's total liabilities?

Accepted Answer

The answer of The following table contains financial information for...

Question 20

Which of the following accounts will NOT be involved in closing entries?

Accepted Answer

The answer of Which of the following accounts will NOT...

Quiz 3: The Accounting Cycle: End of the Period

The closing entry for expenses includes:

Consider the following items: Land Accounts Receivable Notes Payable (due in three years) Accounts Payable Retained Earnings Prepaid Rent Unearned Revenue Buildings Notes Payable (due in six months) Equipment How many of the items listed above are generally long-term assets?

The primary purpose of closing entries is to:

The following financial information is from Shovels Construction Company: What is the amount of current assets,assuming the accounts above reflect normal activity?

Permanent accounts would not include:

Which of the following is true concerning temporary and permanent accounts?

For the first three years of operations,the company reports net income of $1,000,$2,000,and $3,000,and pays dividends of $500,$1,000,and $1,000.What is the balance of retained earnings at the end of the third year?

The purpose of closing entries is to transfer:

When a company prepares closing entries,which one of the following is NOT a correct closing entry?

The following table contains financial information for Fisher Inc.before closing entries: How many of the above accounts are permanent?

The ending balance of Retained Earnings can best be described as:

The following financial information is from Bronco Company.All debt is due within one year unless stated otherwise. What is the amount of current liabilities?

The following table contains financial information for Trumpeter Inc.before closing entries: What is the amount of Trumpeter's total assets?

Resources owned by the company that will provide a benefit for more than one year are called:

Which of the following is a permanent account?

The following table contains financial information for Trumpter's Inc.before closing entries: What is the amount of Trumpter's total stockholders' equity?

The following table contains financial information for Trumpeter Inc.before closing entries: What is Trumpeter's net income?

The following table contains financial information for Trumpter's Inc.before closing entries: What is the amount of Trumpter's total liabilities?

Which of the following accounts will NOT be involved in closing entries?