FAR — Financial Accounting & Reporting — Quiz 20

Questions in this quiz (10)

1. Which account receives net income after closing entries are completed?

   • Cash
   • Retained earnings
   • Accounts receivable
   • Equipment

2. Which entry is used to close the dividends account?

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

3. Which type of account carries forward balances into the next accounting period?

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

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

   • Sales revenue
   • Rent expense
   • Dividends
   • Notes payable

5. Which account reflects accumulated profits retained in the company?

   • Revenue
   • Dividends
   • Retained earnings
   • Expenses

6. Which accounting step verifies that only permanent accounts remain after closing?

   • Adjusted trial balance
   • Post-closing trial balance
   • Journalizing
   • Posting

7. Which account normally has a debit balance?

   • Revenue
   • Accounts payable
   • Land
   • Retained earnings

8. Which account normally carries a credit balance?

   • Expense
   • Revenue
   • Dividends
   • Prepaid insurance

9. Which accounting step ensures revenues and expenses are recognized in the proper period?

   • Recording transactions
   • Adjusting entries
   • Posting
   • Closing entries

10. Which of the following is reduced when depreciation is recorded?

    • Cash
    • Equipment
    • Book value of the asset
    • Accounts payable