Multiple Choice Questions

The income summary account is also called
  • the clearing account
  • either the adjusted trial balance or the Income Statement columns of the end-of-period spreadsheet
  • before the retained earnings statement and balance sheet
  • the closing enteries
Stockholders' equity is
  • after the income statement and before the balance sheet
  • added to liabilities and the two are equal to assets
  • current liabilities and long-term liabilities
  • after the income statement and the retained earnings statement
Which of the following accounts should be closed to Income Summary at the end of the fiscal year?
  • fees earned
  • prepaid insurance
  • service revenue
  • income summary
Unearned Fees appear on the
  • balance sheet as a current liability
  • before the retained earnings statement and balance sheet
  • balance sheet in the noncurrent assets section
  • balance sheet in the property, plant, and equipment section
What is the major difference between the unadjusted trial balance and the adjusted trial balance?
  • the closing enteries
  • un-adjusted, adjusted, postclosing
  • an adjusted trial balance is prepared
  • The adjusted trial balance includes the postings of the adjustments for the period in the balance of the accounts.
Accumulated Depreciation appears on the
  • balance sheet as a current liability
  • balance sheet in the property, plant, and equipment section
  • balance sheet in the noncurrent assets section
  • before the retained earnings statement and balance sheet
The first item appearing on the statement of retained earnings is
  • the beginning balance of retained earnings
  • current liabilities and long-term liabilities
  • current assets and property, plant, and equipment
  • adding investments plus net income less dividends
The accounting cycle requires three trial balances be done. In what order should they be prepared?
  • un-adjusted, adjusted, postclosing
  • debit Income Summary; credit Insurance Expense
  • The adjusted trial balance includes the postings of the adjustments for the period in the balance of the accounts.
  • an adjusted trial balance is prepared
Of the following steps of the accounting cycle, which step should be completed last?
  • un-adjusted, adjusted, postclosing
  • the net income or net loss for the period
  • an adjusted trial balance is prepared
  • The adjusted trial balance includes the postings of the adjustments for the period in the balance of the accounts.
Prepaid insurance is reported on the balance sheet as a
  • current assets and property, plant, and equipment
  • no financial statement
  • current liabilities and long-term liabilities
  • current asset
Which of the following is not an essential part of the accounting records?
  • service revenue
  • fees earned
  • the closing enteries
  • the end-of-period spreadsheet
The statement of retained earnings should be prepared
  • adding investments plus net income less dividends
  • current assets and property, plant, and equipment
  • after the income statement and before the balance sheet
  • after the income statement and the retained earnings statement
Which of the following accounts will be closed to the retained earnings account at the end of the fiscal year?
  • fees earned
  • Prepaid Insurance
  • income summary
  • service revenue
An end-of-period spreadsheet includes columns for
  • the closing enteries
  • current asset
  • the clearing account
  • adjusting entries
Which one of the fixed asset accounts listed below will not have a related contra asset account?
  • fees earned
  • land
  • prepaid insurance
  • service revenue
Notes receivable due in 390 days appear on the
  • balance sheet in the property, plant, and equipment section
  • balance sheet as a current liability
  • balance sheet in the noncurrent assets section
  • before the retained earnings statement and balance sheet
Which of the following account groups are nominal accounts?
  • current assets and property, plant, and equipment
  • the end-of-period spreadsheet
  • service revenue
  • Rent Revenue, Fees Earned, Miscellaneous Expense
Which of the accounts below would be closed by posting a debit to the account?
  • fees earned
  • income summary
  • the closing enteries
  • Service Revenue
Which of the following accounts will not be closed to Income Summary at the end of the fiscal year?
  • the closing enteries
  • prepaid insurance
  • service revenue
  • income summary
The journal entry to close the Fees Earned, $750, and Rent Revenue, $175, accounts during the year-end closing process would be:
  • fiscal year that ends when business activities are at their lowest point
  • adding investments plus net income less dividends
  • Dec. 31 Fees Earned 750 Rent Revenue 175 Income Summary 925
  • debit Income Summary; credit Insurance Expense
On which financial statement will Income Summary be shown?
  • adjusting entries
  • Rent Revenue, Fees Earned, Miscellaneous Expense
  • no financial statement
  • the end-of-period spreadsheet
Debts listed as current liabilities are those that
  • Rent Revenue, Fees Earned, Miscellaneous Expense
  • balance sheet in the noncurrent assets section
  • balance sheet in the property, plant, and equipment section
  • will be paid in less than one year
Which of these accounts would appear in the Balance Sheet columns of the end-of-period spreadsheet?
  • Prepaid Insurance
  • service revenue
  • fees earned
  • the closing enteries
Balance sheet accounts
  • balance sheet as a current liability
  • the clearing account
  • are called real accounts
  • the closing enteries
The classified balance sheet will show which liability subsections?
  • the beginning balance of retained earnings
  • adding investments plus net income less dividends
  • current liabilities and long-term liabilities
  • current assets and property, plant, and equipment
The income statement is prepared from
  • revenues less expenses (ordered largest to smallest amount) with miscellaneous expense listed last
  • before the retained earnings statement and balance sheet
  • either the adjusted trial balance or the Income Statement columns of the end-of-period spreadsheet
  • after the income statement and the retained earnings statement
Which of the items below does not appear on the end-of-period spreadsheet?
  • fees earned
  • service revenue
  • the closing enteries
  • prepaid insurance
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Multiple Choice Questions
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