The entry to close the appropriate insurance account at the end of the accounting period is

A. debit Income Summary; credit Insurance Expense

B. debit Income Summary; credit Prepaid Insurance

C. debit Insurance Expense; credit Income Summary

D. debit Prepaid Insurance; credit Income Summary

Which of the following accounts will be closed to the retained earnings account at the end of the fiscal year?

A. Income Summary

B. Fees Earned

C. Depreciation Expense

D. Rent Expense

Use the information in the adjusted trial balance for Stockton Company to answer the questions that follow.

Stockton Company

Adjusted Trial Balance

For the Year Ended December 31, 20XX

Cash $ 6,530

Accounts Receivable 2,100

Prepaid Expenses 700

Equipment 13,700

Accumulated Depreciation $ 1,100

Accounts Payable 1,900

Notes Payable 4,300

Capital Stock 2,000

Retained Earnings 10,940

Dividends 790

Fees Earned 9,250

Wages Expense 2,500

Rent Expense 1,960

Utilities Expense 775

Depreciation Expense 250

Miscellaneous Expense 185

Totals $29,490 $29,490

Determine the current assets.

A. $23,030

B. $8,630

C. $9,330

D. $21,930

C. $9,330

Cash $ 6,530 + Accounts Receivable 2,100 + Prepaid Expenses 700 = 9,330

Which of the following is not showed on the retained earnings statement of a company?

A. Net income of the company

B. Additional capital stock issued by the company

C. Ending balance of retained earnings

D. Dividends paid by the company

Once the adjusting entries are posted, the adjusted trial balance is prepared to

A. verify that all of the adjustments were posted in the correct accounts

B. verify that the net income (loss) is correct for the period

C. verify that the debits and credits are in balance

D. verify the correct flow of accounts into the financial statements

Bob Evans owns a business, Beachside Realty, that rents condominiums and furnishings. Below is the adjusted trial balance at December 31, 2014.

Debit Credit

Cash $ 1,500

Accounts receivable 2,000

Interest receivable 100

Prepaid insurance 1,600

Notes receivable (longterm)

2,800

Equipment 15,000

Accumulated depreciation $3,000

Accounts payable 2,400

Accrued expenses payable 3,920

Income taxes payable 2,700

Unearned rental fees 500

Capital Stock 2,700

Retained Earnings 5,000

Dividends 2,000

Rental fees earned 37,000

Furniture rental revenue 1,200

Interest revenue 100

Wages expense 19,000

Depreciation expense 1,800

Utilities expense 320

Insurance expense 700

Maintenance expense 9,000

Income tax expense 2,700

$58,520 $58,520

The entry required to close the revenue accounts at the end of the period includes a:

A. debit to Income Summary for $38,200

B. credit to Income Summary for $37,000

C. debit to Income Summary for $37,000

D. credit to Income Summary for $38,300

D. credit to Income Summary for $38,300

Rental fees earned 37,000 + Furniture rental revenue 1,200 + Interest revenue 100 = 38,300

The Journal Entry to close revenues would be

C. debit Fees Earned, $155,000; credit Income Summary, $155,000

Which of the accounts below would be closed by posting a debit to the account?

A. Unearned Revenue

B. Dividends

C. Miscellaneous Expense

D. Fees Earned

During the end-of-period processing, which of the following best describes the logical order of steps?

A. preparation of adjustments, adjusted trial balance, posting

B. preparation of income statement, adjusted trial balance, balance sheet

C. preparation of adjustments, adjusted trial balance, financial statements

D. preparation of adjusted trial balance, cross-referencing, journalizing

The last step of the accounting cycle is to prepare a post-closing trial balance.

True

False

The difference between a classified balance sheet and one that is not classified is that the classified one has subheadings.

True

False

Cash, Accounts Payable, and Capital Stock are real accounts and do not get closed at the end of the period.

True

False

Real accounts are not permanent accounts.

True

False

The balances of the equity accounts from the Adjusted Trial Balance columns of the work sheet are extended to the Retained Earnings Statement columns.

True

False

The work sheet and the financial statements both require dollar signs.

True

False

During the closing process, some balance sheet accounts are closed and end the period with a zero balance.

True

False

When a work sheet is complete, the adjustment columns should have

A. total debits greater than total credits if a net loss was incurred

B. total debits equal total credits

C. total credits greater than total debits if a net income was earned

D. total debits greater than total credits if a net income was earned

Which one of the fixed asset accounts listed below will not have a related contra asset account?

A. Building

B. Land

C. Office Equipment

D. Delivery Equipment

Which of the following is not an essential part of the accounting records?

A. ledger

B. journal

C. work sheet

D. chart of accounts

The work sheet at the end of July has $5,950 in the Balance Sheet credit column for Accumulated Depreciation.

The work sheet at the end of August has $7,600 in the Balance Sheet credit column for Accumulated Depreciation.

What was the amount of the depreciation expense adjustment for the month of August?

A. $1,650

B. $7,600 

C. amount can not be determined

D. $5,950

A. $1,650

$7,600 - $5,950 = $1,650

After posting the second closing entry to the income summary account, the balance will be equal to

A. the net income or (loss) for the period

B. retained earnings

C. zero

D. revenues for the period

Unearned Fees appear on the

A. income statement as revenue

B. balance sheet as a current liability

C. balance sheet in the stockholders’ equity section

D. balance sheet in the current assets section

The usual presentation of the retained earnings statement is (1) beginning retained earnings, (2) net income or

loss, (3) dividends (4) ending retained earnings.

True

False

A net loss is shown on the work sheet in the credit columns of both the Income Statement columns and the Balance Sheet columns.

True

False

In a computerized accounting system, a work sheet may not be necessary because the software program automatically posts entries to the accounts and prepares financial statements.

True

False

Unearned Revenue has a normal balance of Debit

True 

False