16) When the balance in the Income Summary account is a debit, the company has:

A) incurred a net loss.

B) incurred a net income.

C) had more revenue than expenses.

D) made an error in their closing entries.

 

17) Which of the following columns of the worksheet are referred to when preparing closing entries to the Income Summary?

A) Adjusted trial balance columns

B) Balance sheet columns

C) Adjustments columns

D) Income statement columns

18) After posting the closing entries, which of the following accounts is most likely not to have a zero balance?

A) Prepaid Insurance

B) Advertising Expense

C) J. Smith, Withdrawals

D) Medical Fees

 

19) When the balance in the Income Summary account is a credit, the company has:

A) incurred a net loss.

B) incurred a net income.

C) had more expenses than revenue.

D) made an error in their closing entries.

 

20) How do you close a revenue account?

A) Debit Capital; credit Revenue

B) Credit Capital; debit Revenue

C) Credit Income Summary; debit Revenue

D) Debit Income Summary; credit Revenue

 

21) How do you close the expense accounts?

A) Debit Capital; credit the expense accounts

B) Credit Capital; debit the expense accounts

C) Credit Income Summary; debit the expense accounts

D) Debit Income Summary; credit the expense accounts

22) All permanent accounts can be found:

A) on the Income Statement.

B) on the Statement of Owner’s Equity.

C) on the Balance Sheet.

D) Permanent accounts do not appear on the financial statements.

 

23) Closing entries will:

A) increase the Owner’s Capital.

B) decrease the Owner’s Capital balance.

C) either increase or decrease Owner’s Capital.

D) not affect the Owner’s Capital balance.

 

24) On Flex Company’s worksheet the revenue account had a normal balance of $3,800. The entry to close the account would include a:

A) debit to Income Summary for $3,800.

B) credit to Income Summary for $3,800.

C) debit to Flex, Capital for $3,800.

D) credit to Revenue for $3,800.

 

25) The Rent Expense account had a normal balance of $1,100. The entry to close the account would include a:

A) debit to Rent Expense, $1,100.

B) debit to Income Summary, $1,100.

C) debit to Capital, $1,100.

D) credit to Income Summary, $1,100.

 

 



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