FAR — Financial Accounting & Reporting — Quiz 18

Questions in this quiz (10)

1. Which entry closes expense accounts at the end of the accounting period?

   • Debit Expense; Credit Income Summary
   • Debit Income Summary; Credit Expenses
   • Debit Retained Earnings; Credit Expense
   • Debit Cash; Credit Expense

2. Which account temporarily holds net income or loss before it is transferred to retained earnings?

   • Retained earnings
   • Income Summary
   • Accounts payable
   • Dividends

3. Which entry transfers net income from Income Summary to retained earnings?

   • Debit Retained Earnings; Credit Income Summary
   • Debit Income Summary; Credit Retained Earnings
   • Debit Revenue; Credit Retained Earnings
   • Debit Cash; Credit Retained Earnings

4. Which account is used to distribute earnings to shareholders?

   • Dividends
   • Revenue
   • Expense
   • Liability

5. Which entry closes the dividends account at the end of the accounting period?

   • Debit Retained Earnings; Credit Dividends
   • Debit Dividends; Credit Retained Earnings
   • Debit Income Summary; Credit Dividends
   • Debit Dividends; Credit Cash

6. Which type of account appears on the post-closing trial balance?

   • Revenue accounts
   • Expense accounts
   • Permanent accounts
   • Dividends accounts

7. Which account is updated by closing entries?

   • Retained earnings
   • Accounts payable
   • Cash
   • Equipment

8. Which account type carries balances into the next accounting period?

   • Temporary accounts
   • Permanent accounts
   • Revenue accounts
   • Expense accounts

9. Which of the following is a permanent account?

   • Utilities expense
   • Service revenue
   • Land
   • Dividends

10. Which account appears on the post-closing trial balance?

    • Rent expense
    • Service revenue
    • Dividends
    • Notes receivable