Temporary accounts include assets, expenses, and the owner’s drawing account.
True
False
2. Multiple Choice
30 seconds
1 pt
Temporary Accounts are also called nominal accounts.
True
False
3. Multiple Choice
30 seconds
1 pt
Journal entries used to prepare temporary accounts for a new fiscal period are closing entries.
True
False
4. Multiple Choice
30 seconds
1 pt
The balances of the liability accounts must be reduced to zero to prepare the accounts for he next period.
True
False
5. Multiple Choice
30 seconds
1 pt
Permanent accounts are used to accumulate information until it is transferred to the owner’s capital account.
True
False
6. Multiple Choice
30 seconds
1 pt
The capital account’s new balance after all closing entries are posted is verified by checking it with the amount of capital shown on the balance sheet at the end of the fiscal period.
True
False
7. Multiple Choice
30 seconds
1 pt
The ending account balances of permanent accounts for one fiscal period are the beginning account balances for the next fiscal period.
True
False
8. Multiple Choice
30 seconds
1 pt
The Income Summary account has a normal debit balance.
True
False
9. Multiple Choice
30 seconds
1 pt
A post-closing trial balance verifies the equality of debits and credits in a general ledger after the closing entries are posted.
True
False
10. Multiple Choice
30 seconds
1 pt
To close a temporary account, an amount equal to its balance is recorded in the account on the side opposite to its balance.
True
False
11. Multiple Choice
30 seconds
1 pt
The series of accounting activities included in recording financial information for a fiscal period is called an accounting cycle.
True
False
12. Multiple Choice
30 seconds
1 pt
The drawing account is a permanent account.
True
False
13. Multiple Choice
30 seconds
1 pt
Temporary accounts must start each fiscal period with a zero balance.
True
False
14. Multiple Choice
30 seconds
1 pt
At the end of a fiscal period, the balances of permanent accounts are summarized and transferred to the owner's capital account.
True
False
15. Multiple Choice
30 seconds
1 pt
The accounts that appear on the post-closing trial balance are
a. assets, liabilities, and owner’s capital.
b. revenue, expenses, and owner’s drawing.
c. all accounts in the chart of accounts.
d. all temporary accounts.
16. Multiple Choice
30 seconds
1 pt
The last step in the accounting cycle is to
a. record transactions in a journal.
b. prepare a work sheet.
c. journalize and post closing entries.
d. prepare a post-closing trial balance.
17. Multiple Choice
30 seconds
1 pt
Income Summary is a(n)
a. asset account.
b. liability account.
c. temporary account.
d. permanent account.
18. Multiple Choice
30 seconds
1 pt
When the total expenses are greater than the total revenues,
a. the Income Summary account has a credit balance.
b. the Income Summary account has a debit balance.
c. debits equal credits.
d. none of these.
19. Multiple Choice
30 seconds
1 pt
Accounts used to accumulate information from one fiscal period to the next are
a. revenue accounts.
b. permanent accounts.
c. temporary accounts.
d. expense accounts.
20. Multiple Choice
30 seconds
1 pt
After the closing entries are posted, the owner’s capital account balance should be the same as shown
a. on the balance sheet for the fiscal period.
b. in the work sheet’s Balance Sheet Debit column.
c. in the work sheet’s Balance Sheet Credit column.
d. in the work sheet’s Income Statement Debit column.
21. Multiple Choice
30 seconds
1 pt
After closing entries are posted, the balance in the owner’s drawing account should be
a. a debit.
b. zero.
c. a credit.
d. none of these.
22. Multiple Choice
30 seconds
1 pt
Temporary accounts begin each new fiscal period with a
a. debit balance.
b. credit balance.
c. zero balance.
d. balance equal to the net income.
23. Multiple Choice
30 seconds
1 pt
The journal entry to close Income Summary when there is a net income is