36) The entry to close the revenue account(s) was entered in reverse—Income Summary was debited and the revenue account(s) was/were credited. The result of this error is that:

A) before closing it, Income Summary will have a credit balance.

B) before closing it, Income Summary will have a debit balance.

C) the assets will be overstated.

D) the liabilities will be overstated.

 

37) The following normal account balances were found on the general ledger before closing entries were prepared:

 

Revenue $800

Cash $500

Expenses $400

Accounts Receivable $350

Capital $7,500

Withdrawals $1,000

 

After closing entries are posted, what is the balance in the Revenue account?

A) $800

B) $0

C) $300

D) Closing entries do not affect Revenue.

38) The following normal account balances were found on the general ledger before closing entries were prepared:

 

Revenue $700

Cash $600

Expenses $400

Accounts Receivable $400

Capital $7,500

Withdrawals $1,000

 

After closing entries are posted, what is the balance in the Capital account?

A) $7,800

B) $7,500

C) $6,800

D) Closing entries do not affect the Capital account.

 

39) The following normal account balances were found on the general ledger before closing entries were prepared:

 

Revenue $600

Cash $500

Expenses $400

Accounts Receivable $350

Capital $7,500

Withdrawals $1,000

 

After closing entries are posted, what is the balance in the Cash account?

A) $800

B) $0

C) $300

D) Closing entries do not affect the Cash account.

 

40) The entry to close the Withdrawal account was entered in reverse—the Withdrawal account was debited and Capital credited. The result of this error is that:

A) before closing it, Income Summary will have a credit balance.

B) before closing it, Income Summary will have a debit balance.

C) the end of period capital will be understated.

D) the end of period capital will be overstated.

41) The entry to close Income Summary (net loss) was entered in reverse—Income Summary was debited and Capital was credited. This error will cause:

A) Income Summary to have a credit balance.

B) Income Summary to have a debit balance.

C) the assets to be overstated.

D) the liabilities to be overstated.

 

42) Which of the following is a real account?

A) Cash

B) Fees Earned

C) Utilities Expense

D) Income Summary

 

43) Which of the following is not a temporary account?

A) Wages Expense

B) Service Fees

C) Rent Expense

D) Capital

 

44) The entry to close Income Summary (net loss) to Capital was omitted. This error will cause:

A) the ending capital to be overstated.

B) the ending capital to be understated.

C) no error in the ending capital balance.

D) None of these are correct.

45) When Income Summary has a credit balance and the account is closed:

A) Capital is decreased.

B) Capital is increased.

C) Withdrawals is increased.

D) None of these are correct.

 

 

 



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