11 Accounting - February 22, 2016 - Quiz, Trivia & Questions

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| By Jan Morrison

Jan Morrison

Community Contributor

Quizzes Created: 3 | Total Attempts: 1,970

Questions: 11 | Attempts: 288 | Updated: Mar 20, 2023

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Questions and Answers

1.

Which of the following is the correct order for the accounting cycle?
- A.
  
  Journal, ledger, adjusted worksheet, financial statements, closing entries
- B.
  
  Journal, ledger, adjusted worksheet, closing entries, financial statements
- C.
  
  Ledger, journal, adjusted worksheet, financial statements, closing entries
- D.
  
  Journal, ledger, closing entries, financial statements, adjusted worksheet
Correct Answer
A. Journal, ledger, adjusted worksheet, financial statements, closing entries

Explanation
The correct order for the accounting cycle is as follows: First, transactions are recorded in the journal. Then, these transactions are posted to the ledger. Next, an adjusted worksheet is prepared to reflect any necessary adjustments. After that, financial statements are prepared based on the information from the adjusted worksheet. Finally, closing entries are made to close out temporary accounts and transfer their balances to the appropriate permanent accounts.

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2.

Which of the following is the correct order for the accounting cycle?
- A.
  
  Journal, ledger, trial balance, adjustments, closing entries, financial statements
- B.
  
  Journal, ledger, adjustments, closing entries, trial balance, financial statements
- C.
  
  Journal, ledger, trial balance, financial statements, adjustments, closing entries
- D.
  
  Journal, ledger, trial balance, adjustments, financial statements, closing entries
Correct Answer
D. Journal, ledger, trial balance, adjustments, financial statements, closing entries

Explanation
The correct order for the accounting cycle is as follows: journal, ledger, trial balance, adjustments, financial statements, closing entries. This order represents the typical flow of activities in the accounting process. The journal is used to record all transactions, which are then posted to the ledger. The trial balance is prepared to ensure that debits and credits are equal. Adjustments are made to account for any necessary changes, and then the financial statements are prepared based on the adjusted balances. Finally, closing entries are made to reset the temporary accounts and prepare the books for the next accounting period.

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3.

On the worksheet, in which columns does a net income appear?
- A.
  
  Income statement debit and balance sheet credit
- B.
  
  Income statement credit and balance sheet debit
- C.
  
  Income statement debit and balance sheet debit
- D.
  
  Income statement credit and balance sheet credit
Correct Answer
A. Income statement debit and balance sheet credit

Explanation
A net income appears in the income statement debit and balance sheet credit columns. In the income statement, net income is calculated by subtracting all expenses from the total revenue. It is recorded as a debit because it represents an increase in assets or a decrease in liabilities. On the other hand, in the balance sheet, net income is transferred to the retained earnings account, which is a part of shareholders' equity. It is recorded as a credit because it represents an increase in the company's overall net worth.

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4.

Which of the following accounts gets closed?
- A.
  
  Prepaid Insurance
- B.
  
  Accumulated Depreciation - equipment
- C.
  
  Supplies
- D.
  
  Rent Expense
Correct Answer
D. Rent Expense

Explanation
Rent Expense gets closed because it is an expense account that represents the cost of renting a property for a specific period. At the end of the accounting period, the Rent Expense account is closed by transferring its balance to the Income Summary account, which is then closed to the Retained Earnings account. This process is part of the closing entries made to prepare the accounts for the next accounting period.

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5.

Which of the following accounts does NOT get closed?
- A.
  
  Capital
- B.
  
  Drawings
- C.
  
  Sales
- D.
  
  Salaries expense
Correct Answer
A. Capital

Explanation
Capital is an account that represents the owner's investment in the business and is considered a permanent account. It is not closed at the end of an accounting period because it carries over from one period to the next. Drawings, sales, and salaries expense are all temporary accounts that are closed at the end of the accounting period to reset the balances for the next period.

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6.

In the event of a net loss, what would happen to the Income Summary Account during the closing entries?
- A.
  
  It would be debited.
- B.
  
  It would be credited.
- C.
  
  It would not be used.
Correct Answer
B. It would be credited.

Explanation
During the closing entries, the net loss is transferred to the Income Summary Account. Since the net loss represents a decrease in the company's equity, the Income Summary Account is credited to reflect this decrease. By crediting the Income Summary Account, the loss is closed out and transferred to the retained earnings account, ultimately reducing the overall equity of the company.

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7.

What would be a suitable account # for the Income Summary account?
- A.
  
  103
- B.
  
  203
- C.
  
  303
- D.
  
  403
Correct Answer
C. 303

Explanation
The suitable account number for the Income Summary account is 303. This account number is likely chosen based on a specific numbering system or chart of accounts used by the organization. The number 303 may have been assigned to the Income Summary account for ease of identification and organization within the accounting system.

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8.

On which financial statement does the Income Summary account appear?
- A.
  
  Income statement
- B.
  
  Statement of owner's equity
- C.
  
  Balance sheet
- D.
  
  None of the above
Correct Answer
D. None of the above

Explanation
The Income Summary account does not appear on any of the financial statements. It is a temporary account used during the closing process to transfer the net income or net loss to the retained earnings account. The income statement shows the revenues and expenses, the statement of owner's equity shows the changes in the owner's capital, and the balance sheet shows the assets, liabilities, and equity at a specific point in time. The Income Summary account is not directly reported on any of these statements.

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9.

How many closing journal entries do you have to make?
- A.
  
  1
- B.
  
  2
- C.
  
  3
- D.
  
  4
Correct Answer
D. 4

Explanation
The question is asking how many closing journal entries need to be made. Closing journal entries are made at the end of an accounting period to transfer the balances of temporary accounts (such as revenue and expense accounts) to the retained earnings account. Since there are typically four types of temporary accounts (revenue, expense, income summary, and dividends), four closing journal entries need to be made.

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10.

In which column of the worksheet do we show the drawings account?
- A.
  
  Income statement debit
- B.
  
  Income statement credit
- C.
  
  Balance sheet debit
- D.
  
  Balance sheet credit
Correct Answer
C. Balance sheet debit

Explanation
The drawings account represents the amount of money that the owner has withdrawn from the business for personal use. This account is typically shown on the balance sheet, as it represents a decrease in the owner's equity in the business. Debit is the side of the balance sheet where assets and expenses are recorded, making balance sheet debit the correct column for showing the drawings account.

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11.

On the worksheet, when you subtract balance sheet debits from balance sheet credits, what should the result be equal to?
- A.
  
  Capital
- B.
  
  Net income
- C.
  
  Total assets
- D.
  
  Total liabilities
Correct Answer
B. Net income

Explanation
When you subtract balance sheet debits from balance sheet credits, the result should be equal to net income. This is because the balance sheet equation states that assets = liabilities + equity. Net income is a component of equity and represents the profit or loss generated by a company during a specific period. By subtracting debits (which increase assets or decrease liabilities) from credits (which decrease assets or increase liabilities), we can determine the net change in equity, which is equal to net income.

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Current Version
Mar 20, 2023

Quiz Edited by
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Jan 12, 2015

Quiz Created by
Jan Morrison

11 Accounting - February 22, 2016

Which of the following is the correct order for the accounting cycle?

Which of the following is the correct order for the accounting cycle?

On the worksheet, in which columns does a net income appear?

Which of the following accounts gets closed?

Which of the following accounts does NOT get closed?

In the event of a net loss, what would happen to the Income Summary Account during the closing entries?

What would be a suitable account # for the Income Summary account?

On which financial statement does the Income Summary account appear?

How many closing journal entries do you have to make?

In which column of the worksheet do we show the drawings account?

On the worksheet, when you subtract balance sheet debits from balance sheet credits, what should the result be equal to?