Closing entries are made a. in order to terminate the business as an operating entity. b. so that all assets, liabilities, and Stockholders' equity accounts will have zero balances when the next accounting period starts. c. in order to transfer net income (or loss) and dividends to the retained earnings account. d. so that financial statements can be prepared.

Closing entries are made
a. in order to terminate the business as an operating entity.
b. so that all assets, liabilities, and Stockholders' equity accounts will have zero balances  when the next accounting period starts.
c. in order to transfer net income (or loss) and dividends to the retained earnings  account.
d. so that financial statements can be prepared.
by

1 Answer

Answer :

c. in order to transfer net income (or loss) and dividends to the retained earnings  account.
unt.
by

Related questions

In preparing closing entries a. each revenue account will be credited. b. each expense account will be credited. c. the retained earnings account will be debited if there is net income for the period. d. the dividends account will be debited.

Description : In preparing closing entries a. each revenue account will be credited. b. each expense account will be credited. c. the retained earnings account will be debited if there is net income for the period. d. the dividends account will be debited.

Last Answer : b. each expense account will be credited.

Closing entries a. are prepared before the financial statements. b. reduce the number of permanent accounts. c. cause the revenue and expense accounts to have zero balances. d. summarize the activity in every account.

Description : Closing entries a. are prepared before the financial statements. b. reduce the number of permanent accounts. c. cause the revenue and expense accounts to have zero balances. d. summarize the activity in every account.

Last Answer : c. cause the revenue and expense accounts to have zero balances.

The purpose of the post-closing trial balance is to a. prove that no mistakes were made. b. prove the equality of the balance sheet account balances that are carried forward into the next accounting period. c. prove the equality of the income statement account balances that are carried forward into the next accounting period. d. list all the balance sheet accounts in alphabetical order for easy reference.

Description : The purpose of the post-closing trial balance is to a. prove that no mistakes were made. b. prove the equality of the balance sheet account balances that are carried forward into the ... next accounting period. d. list all the balance sheet accounts in alphabetical order for easy reference.

Last Answer : b. prove the equality of the balance sheet account balances that are carried forward into the next accounting period.

The final closing entry to be journalized is typically the entry that closes the a. revenue accounts. b. dividends account. c. retained earnings account. d. expense accounts.

Description : The final closing entry to be journalized is typically the entry that closes the a. revenue accounts. b. dividends account. c. retained earnings account. d. expense accounts.

Last Answer : b. dividends account.

A post-closing trial balance will show a. only permanent account balances. b. only temporary account balances. c. zero balances for all accounts. d. the amount of net income (or loss) for the period.

Description : A post-closing trial balance will show a. only permanent account balances. b. only temporary account balances. c. zero balances for all accounts. d. the amount of net income (or loss) for the period.

Last Answer : a. only permanent account balances.

If Income Summary has a credit balance after revenues and expenses have been closed into it, the closing entry for Income Summary will include a a. debit to the retained earnings account. b. debit to the owner’s dividends account. c. credit to the retained earnings account. d. credit to the owner’s dividends account.

Description : If Income Summary has a credit balance after revenues and expenses have been closed into it, the closing entry for Income Summary will include a a. debit to the retained earnings account. b. debit ... . c. credit to the retained earnings account. d. credit to the owner's dividends account.

Last Answer : c. credit to the retained earnings account.

All of the following are stockholders’ equity accounts except a. Common Stock. b. Capital Stock. c. Investment in Stock. d. Retained Earnings.

Description : All of the following are stockholders’ equity accounts except a. Common Stock. b. Capital Stock. c. Investment in Stock. d. Retained Earnings.

Last Answer : c. Investment in Stock.

ncome Summary has a credit balance of $12,000 in J. Sawyer Co. after closing revenues and expenses. The entry to close Income Summary is a. credit Income Summary $12,000, debit Retained Earnings $12,000. b. credit Income Summary $12,000, debit Dividends $12,000. c. debit Income Summary $12,000, credit Dividends $12,000. d. debit Income Summary $12,000, credit Retained Earnings $12,000.

Description : ncome Summary has a credit balance of $12,000 in J. Sawyer Co. after closing revenues and expenses. The entry to close Income Summary is a. credit Income Summary $12,000, debit Retained Earnings ... 000, credit Dividends $12,000. d. debit Income Summary $12,000, credit Retained Earnings $12,000.

Last Answer : d. debit Income Summary $12,000, credit Retained Earnings $12,000.

Which account listed below would be double ruled in the ledger as part of the closing process? a. Cash b. Retained Earnings c. Dividends

Description : Which account listed below would be double ruled in the ledger as part of the closing process? a. Cash b. Retained Earnings c. Dividends

Last Answer : c. Dividends

In order to close the dividends account, the a. income summary account should be debited. b. income summary account should be credited. c. retained earnings account should be credited. d. retained earnings account should be debited.

Description : In order to close the dividends account, the a. income summary account should be debited. b. income summary account should be credited. c. retained earnings account should be credited. d. retained earnings account should be debited.

Last Answer : d. retained earnings account should be debited.

The post-closing trial balance contains only a. income statement accounts. b. balance sheet accounts. c. balance sheet and income statement accounts. d. income statement, balance sheet, and retained earnings statement account

Description : The post-closing trial balance contains only a. income statement accounts. b. balance sheet accounts. c. balance sheet and income statement accounts. d. income statement, balance sheet, and retained earnings statement account

Last Answer : b. balance sheet accounts.

Which one of the following is usually prepared only at the end of a company's annual accounting period? a. Preparing financial statements b. Journalizing and posting adjusting entries c. Journalizing and posting closing entries d. Preparing an adjusted trial balance

Description : Which one of the following is usually prepared only at the end of a company's annual accounting period? a. Preparing financial statements b. Journalizing and posting adjusting entries c. Journalizing and posting closing entries d. Preparing an adjusted trial balance

Last Answer : c. Journalizing and posting closing entries

Closing entries are journalized and posted a. before the financial statements are prepared. b. after the financial statements are prepared. c. at management's discretion. d. at the end of each interim accounting period.

Description : Closing entries are journalized and posted a. before the financial statements are prepared. b. after the financial statements are prepared. c. at management's discretion. d. at the end of each interim accounting period.

Last Answer : b. after the financial statements are prepared.

The balance in the income summary account before it is closed will be equal to a. the net income or loss on the income statement. b. the beginning balance in the retained earnings account. c. the ending balance in the retained earnings account. d. zero.

Description : The balance in the income summary account before it is closed will be equal to a. the net income or loss on the income statement. b. the beginning balance in the retained earnings account. c. the ending balance in the retained earnings account. d. zero.

Last Answer : a. the net income or loss on the income statement.

The closing entry process consists of closing a. all asset and liability accounts. b. out the retained earnings account. c. all permanent accounts. d. all temporary accounts.

Description : The closing entry process consists of closing a. all asset and liability accounts. b. out the retained earnings account. c. all permanent accounts. d. all temporary accounts.

Last Answer : d. all temporary accounts.

The balances that appear on the post-closing trial balance will match the a. income statement account balances after adjustments. b. balance sheet account balances after closing entries. c. income statement account balances after closing entries. d. balance sheet account balances after adjustments.

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The two optional steps in the accounting cycle are preparing a. a post-closing trial balance and reversing entries. b. a worksheet and post-closing trial balances. c. reversing entries and a worksheet. d. an adjusted trial balance and a post-closing trial balance.

Description : The two optional steps in the accounting cycle are preparing a. a post-closing trial balance and reversing entries. b. a worksheet and post-closing trial balances. c. reversing entries and a worksheet. d. an adjusted trial balance and a post-closing trial balance.

Last Answer : c. reversing entries and a worksheet.

All of the following statements about the post-closing trial balance are correct except it a. shows that the accounting equation is in balance. b. provides evidence that the journalizing and posting of closing entries have been properly completed. c. contains only permanent accounts. d. proves that all transactions have been recorded.

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The heading for a post-closing trial balance has a date line that is similar to the one found on a. a balance sheet. b. an income statement. c. an stockholders' equity statement. d. the worksheet.

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If errors occur in the recording process, they a. should be corrected as adjustments at the end of the period. b. should be corrected as soon as they are discovered. c. should be corrected when preparing closing entries. d. cannot be corrected until the next accounting period.

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The final step in the accounting cycle is to prepare a. closing entries. b. financial statements. c. a post-closing trial balance. d. adjusting entries.

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Financial Statements provide a summary of -------------------------- a) Accounts b) Assets c) Liabilities d) Expenses

Description : Financial Statements provide a summary of -------------------------- a) Accounts b) Assets c) Liabilities d) Expenses

Last Answer : a) Accounts

The summarized balance sheet of Autolight Limited shows the balances of previous and current year of retained earnings Rs. 25,000 and Rs. 35,000. If dividend paid during the current year amounted to Rs. 5,000 then profit earned during the year will be: (a) Rs. 5,000 (b) Rs. 55,000 (c) Rs. 15,000 (d) Rs. 65,000

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The most important information needed to determine if companies can pay their current obligations is the a. net income for this year. b. projected net income for next year. c. relationship between current assets and current liabilities. d. relationship between short-term and long-term liabilities.

Description : The most important information needed to determine if companies can pay their current obligations is the a. net income for this year. b. projected net income for next year. c. ... between current assets and current liabilities. d. relationship between short-term and long-term liabilities.

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What is total liabilities and stockholders' equity at December 31, 2008? a. $176,000 b. $190,000 c. $218,000 d. $232,000

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he step in the accounting cycle that is performed on a periodic basis (i.e., monthly, quarterly) is a. analyzing transactions. b. journalizing and posting adjusting entries. c. preparing a post-closing trial balance. d. posting to ledger accounts.

Description : he step in the accounting cycle that is performed on a periodic basis (i.e., monthly, quarterly) is a. analyzing transactions. b. journalizing and posting adjusting entries. c. preparing a post-closing trial balance. d. posting to ledger accounts.

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A post-closing trial balance should be prepared a. before closing entries are posted to the ledger accounts. b. after closing entries are posted to the ledger accounts. c. before adjusting entries are posted to the ledger accounts. d. only if an error in the accounts is detected.

Description : A post-closing trial balance should be prepared a. before closing entries are posted to the ledger accounts. b. after closing entries are posted to the ledger accounts. c. before adjusting entries are posted to the ledger accounts. d. only if an error in the accounts is detected.

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Correcting entries are made a. at the beginning of an accounting period. b. at the end of an accounting period. c. whenever an error is discovered. d. after closing entries.

Description : Correcting entries are made a. at the beginning of an accounting period. b. at the end of an accounting period. c. whenever an error is discovered. d. after closing entries.

Last Answer : c. whenever an error is discovered.

A correcting entry a. must involve one balance sheet account and one income statement account. b. is another name for a closing entry. c. may involve any combination of accounts. d. is a required step in the accounting cycle.

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A double rule applied to accounts in the ledger during the closing process implies that a. the account is an income statement account. b. the account is a balance sheet account. c. the account balance is not zero. d. a mistake has been made, since double ruling is prescribed.

Description : A double rule applied to accounts in the ledger during the closing process implies that a. the account is an income statement account. b. the account is a balance sheet account. c. the account balance is not zero. d. a mistake has been made, since double ruling is prescribed.

Last Answer : a. the account is an income statement account.

After the adjusting entries are journalized and posted to the accounts in the general ledger, the balance of each account should agree with the balance shown on the a. adjusted trial balance. b. post-closing trial balance. c. the general journal. d. adjustments columns of the worksheet.

Description : After the adjusting entries are journalized and posted to the accounts in the general ledger, the balance of each account should agree with the balance shown on the a. adjusted trial balance. b. post-closing trial balance. c. the general journal. d. adjustments columns of the worksheet.

Last Answer : a. adjusted trial balance.

Which of the following is a true statement about closing the books of a corporation? a. Expenses are closed to the Expense Summary account. b. Only revenues are closed to the Income Summary account. c. Revenues and expenses are closed to the Income Summary account. d. Revenues, expenses, and the dividends account are closed to the Income Summary account.

Description : Which of the following is a true statement about closing the books of a corporation? a. Expenses are closed to the Expense Summary account. b. Only revenues are closed to the Income Summary ... account. d. Revenues, expenses, and the dividends account are closed to the Income Summary account.

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In financial accounting of a chemical plant, which of the following relationship is invalid? (A) Assets = equities (B) Assets = liabilities + net worth (C) Total income = costs + profits (D) Assets = capital

Description : In financial accounting of a chemical plant, which of the following relationship is invalid? (A) Assets = equities (B) Assets = liabilities + net worth (C) Total income = costs + profits (D) Assets = capital

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In preparing closing entries for a merchandising company, the Income Summary account will be credited for the balance of a. sales. b. merchandise inventory. c. sales discounts. d. freight-out.

Description : In preparing closing entries for a merchandising company, the Income Summary account will be credited for the balance of a. sales. b. merchandise inventory. c. sales discounts. d. freight-out.

Last Answer : b. merchandise inventory.

Which of the following steps in the accounting cycle would not generally be performed daily? a. Journalize transactions b. Post to ledger accounts c. Prepare adjusting entries d. Analyze business transactions

Description : Which of the following steps in the accounting cycle would not generally be performed daily? a. Journalize transactions b. Post to ledger accounts c. Prepare adjusting entries d. Analyze business transactions

Last Answer : c. Prepare adjusting entries

Correcting entries a. always affect at least one balance sheet account and one income statement account. b. affect income statement accounts only. c. affect balance sheet accounts only. d. may involve any combination of accounts in need of correction.

Description : Correcting entries a. always affect at least one balance sheet account and one income statement account. b. affect income statement accounts only. c. affect balance sheet accounts only. d. may involve any combination of accounts in need of correction.

Last Answer : d. may involve any combination of accounts in need of correction.

Which of the following is an optional step in the accounting cycle? a. Adjusting entries b. Closing entries c. Correcting entries d. Reversing entries

Description : WWhich of the following is an optional step in the accounting cycle? a. Adjusting entries b. Closing entries c. Correcting entries d. Reversing entries

Last Answer : d. Reversing entries

Which of the following steps in the accounting cycle may be performed more frequently than annually? a. Prepare a post-closing trial balance b. Journalize closing entries c. Post closing entries d. Prepare a trial balance

Description : Which of the following steps in the accounting cycle may be performed more frequently than annually? a. Prepare a post-closing trial balance b. Journalize closing entries c. Post closing entries d. Prepare a trial balance

Last Answer : d. Prepare a trial balance

Gross assets are Rs.1,01,000, fictitious assets Rs.350 are included in the gross assets. External liabilities are Rs.7,500. 6% prefer share capital is Rs.45,000. Equity capital is 4,500 equity shares of Rs.10 each fully paid. Average expected profit is Rs.8,500. Transfer to reserves is 10%. Pref. dividend is payable. NRR is 9%. The Net Asset Value Per share is A Rs.11 B Rs.10.70 C Rs.15 D Rs.20s

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Last Answer : Rs.10.70

Closing entries are necessary for a. permanent accounts only. b. temporary accounts only. c. both permanent and temporary accounts. d. permanent or real accounts only.

Description : Closing entries are necessary for a. permanent accounts only. b. temporary accounts only. c. both permanent and temporary accounts. d. permanent or real accounts only.

Last Answer : b. temporary accounts only.

The relationship between current assets and current liabilities is important in evaluating a company's a. profitability. b. liquidity. c. market value. d. accounting cycle.

Description : The relationship between current assets and current liabilities is important in evaluating a company's a. profitability. b. liquidity. c. market value. d. accounting cycle.

Last Answer : b. liquidity.

Current liabilities a. are obligations that the company is to pay within the forthcoming year. b. are listed in the balance sheet in order of their expected maturity. c. are listed in the balance sheet, starting with accounts payable. d. should not include long-term debt that is expected to be paid within the next year.

Description : Current liabilities a. are obligations that the company is to pay within the forthcoming year. b. are listed in the balance sheet in order of their expected maturity. c. are listed in the balance sheet, ... . d. should not include long-term debt that is expected to be paid within the next year.

Last Answer : a. are obligations that the company is to pay within the forthcoming year. b. are listed in the balance sheet in order of their expected maturity.

Each of the following accounts is closed to Income Summary except a. Expenses. b. Dividends. c. Revenues. d. All of these are closed to Income Summary.

Description : Each of the following accounts is closed to Income Summary except a. Expenses. b. Dividends. c. Revenues. d. All of these are closed to Income Summary.

Last Answer : b. Dividends.

Current assets are Rs.6,00,000 current liabilities are Rs.3,00,000 the debtors realized Rs.40,000, the impact on net working capital would be------------------------- a) No change in working capital b) Decrease of working capital by Rs.80,000 c) Increase of working capital by Rs.40,000 d) None of these

Description : Current assets are Rs.6,00,000 current liabilities are Rs.3,00,000 the debtors realized Rs.40,000, the impact on net working capital would be------------------------- a) No change in working ... Decrease of working capital by Rs.80,000 c) Increase of working capital by Rs.40,000 d) None of these

Last Answer : a) No change in working capital

Net capital employed is equal to --------------- a) Total assets minus liabilities b) Fixed asset plus net working capital c) Total asset minus long-term liabilities d) Total assets

Description : Net capital employed is equal to --------------- a) Total assets minus liabilities b) Fixed asset plus net working capital c) Total asset minus long-term liabilities d) Total assets

Last Answer : b) Fixed asset plus net working capital

Disclose accounting information a) Balance sheet b) Trading account c) Profit and Loss Account d) Financial statements

Description : Disclose accounting information a) Balance sheet b) Trading account c) Profit and Loss Account d) Financial statements

Last Answer : d) Financial statements

Net Assets of D.Co. for Purchase Consideration worth Rs. 4,00,000. At the time of absorption, the company has paid 32,000 equity shares each of Rs.10 each at 10% premium, then remaining cash will be - (A) Rs. 48,000 (B) Rs. 84,000 (C) Rs. 80,000 (D) Rs. 90,000

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Last Answer : (A) Rs. 48,000

Which statement is true? 1) The balance of payments depends on the principle of double-entry accounting. 2) Decrease in assets and increase in liabilities of net worth represent credits or sources of funds. 3) The balance of payment is a source- and uses of funds statement that reflects changes in assets, liabilities and net worth during a specified period of time. A. Only 1 B. Only 2 C. Only 3 D. 1, 2 and 3

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Last Answer : D. 1, 2 and 3