Accounting Chapter 10 Closing Entries
Chapter 10 is a review of Closing Entries.
- 1.Permanent accounts are found on the Balance Sheet section of the work sheet.
- A.
True
- B.
False
- 2.The entry to close the Income Summary account is always the same: Debit Income Summary and Credit Owner's Capital.
- A.
True
- B.
False
- 3.Closing entries consists of 4 journal transactions.
- A.
True
- B.
False
- 4.No calculations are needed in the closing entry process as all numbers come from the worksheet.
- A.
True
- B.
False
- 5.Closing entries reduce the Capital balance to zero.
- A.
True
- B.
False
- 6.Income Summary has a normal debit balance.
- A.
True
- B.
False
- 7.Closing accounts refers to forcing temporary accounts to have zero balances.
- A.
True
- B.
False
- 8.Income Summary is the same thing as Net Income or Net Loss.
- A.
True
- B.
False
- 9.The 4 steps to the process of closing entries are: 1. Close the Revenue accounts to Income Summary 2. Close the Expenses to Income Summary. 3. Close Income Summary to capital. 4. Close withdrawals to Income Summary
- A.
True
- B.
False
- 10.If total Revenue is greater than total Expenses (Net Income), than the closing entry would be:
- A.
Debit Capital Credit Income Summary
- B.
Debit Income Summary Credit Net Income
- C.
Debit Revenue Credit Expenses
- D.
Debit Income Summary Credit Capital
- 11.When your total Revenue is less than your total Expenses you have a:
- A.
Net Income
- B.
Net Loss
- C.
Net Worth
- D.
Fishing Net
- 12.The 4 temporary accounts are:
- A.
Assets, Liabilities, Owner's Equity (Capital)
- B.
Revenue, Expenses, Income Summary, Withdrawals
- C.
Revenue, Expenses, Net Income, Withdrawals
- D.
Revenue, Expenses, Assets, Capital
- 13.Temporary accounts must be closed because their balances apply to only two accounting periods.
- A.
True
- B.
False
- 14.Closing entries transfer the net income or net loss to the withdrawals account.
- A.
True
- B.
False
- 15.How do you close a revenue account?
- A.
Debit it for the amount of its credit balance.
- B.
Credit it for the amount of its debit balance.
- C.
Debit Income Summary.
- D.
Credit Accounts Receivable.
- 16.The acronym DEAD stands for .....
- A.
Did Everyone Ask Dad
- B.
Does Everyone's Account Debit?
- C.
Debits (increase) Expenses, Assets, and Drawing
- D.
Debbie Eats Acidic Donuts
- 17.When expense accounts are closed, the Income Summary account is credited.
- A.
True
- B.
False
- 18.The Income Summary account is an income statement in the ledger.
- A.
True
- B.
False
- 19.After the closing entries have been posted to the general ledger, the balance of the capital account now reflects the net income (or loss) and the deduction of any withdrawals from the business.
- A.
True
- B.
False
- 20.Which of the following accounts is NOT closed at the end of the accounting period:
- A.
Fees (Revenue)
- B.
Rent Expense
- C.
Withdrawals
- D.
Capital
- 21.Transferring the balances of the expense accounts is the 2nd closing entry.
- A.
True
- B.
False
- 22.Accounts that start each new accounting period with zero balances are known as:
- A.
Liability accounts
- B.
Capital accounts
- C.
Permanent accounts
- D.
Temporary accounts
- 23.Which of the following statements is true?
- A.
The income summary has a normal debit balance.
- B.
The income summary has a normal credit balance.
- C.
The income summary has no normal balance side.
- D.
The income summary account does not exist.
- 24.Net income increases which account?
- A.
Accounts Receivable
- B.
Capital
- C.
Withdrawals
- D.
Rent Expense
- 25.The balance of a revenue account is transferred to the:
- A.
Debit side of withdrawals
- B.
Debit side of cash
- C.
Credit side of Income Summary
- D.
Credit side of Capital
Questions: 41 | Attempts: 72423 | Last updated: Jan 16, 2022
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