FAR — Financial Accounting & Reporting — Quiz 19

Questions in this quiz (10)

1. Which accounting step resets temporary account balances to zero at the beginning of a new period?

   • Adjusting entries
   • Closing entries
   • Posting
   • Journalizing

2. Which account reflects accumulated earnings retained in the business?

   • Revenue
   • Retained earnings
   • Dividends
   • Expense

3. Which accounting cycle step occurs after closing entries are completed?

   • Recording adjusting entries
   • Preparing the post-closing trial balance
   • Recording transactions
   • Preparing financial statements

4. How does net income affect retained earnings?

   • Net income decreases retained earnings
   • Net income increases retained earnings
   • Net income has no effect on retained earnings
   • Net income eliminates retained earnings

5. Which of the following is classified as a permanent account?

   • Utilities expense
   • Service revenue
   • Accounts receivable
   • Dividends

6. Which account is considered a temporary account?

   • Notes payable
   • Accumulated depreciation
   • Sales revenue
   • Equipment

7. Which accounting step transfers revenues and expenses to retained earnings?

   • Posting
   • Closing entries
   • Adjusting entries
   • Preparing financial statements

8. Which account temporarily accumulates net income before transferring to retained earnings?

   • Income Summary
   • Retained Earnings
   • Accounts Payable
   • Cash

9. Which entry closes revenue accounts?

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

10. Which entry closes expense accounts?

    • Debit Expense; Credit Income Summary
    • Debit Income Summary; Credit Expense
    • Debit Cash; Credit Expense
    • Debit Expense; Credit Cash