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Principles of Accounting, Volume 1: Financial Accounting

Multiple Choice

Principles of Accounting, Volume 1: Financial AccountingMultiple Choice

Multiple Choice

1.

LO 5.1Which of the following accounts is considered a temporary or nominal account?

  1. Fees Earned Revenue
  2. Prepaid Advertising
  3. Unearned Service Revenue
  4. Prepaid Insurance
2.

LO 5.1Which of the following accounts is considered a permanent or real account?

  1. Interest Revenue
  2. Prepaid Insurance
  3. Insurance Expense
  4. Supplies Expense
3.

LO 5.1If a journal entry includes a debit or credit to the Cash account, it is most likely which of the following?

  1. a closing entry
  2. an adjusting entry
  3. an ordinary transaction entry
  4. outside of the accounting cycle
4.

LO 5.1If a journal entry includes a debit or credit to the Retained Earnings account, it is most likely which of the following?

  1. a closing entry
  2. an adjusting entry
  3. an ordinary transaction entry
  4. outside of the accounting cycle
5.

LO 5.1Which of these accounts would be present in the closing entries?

  1. Dividends
  2. Accounts Receivable
  3. Unearned Service Revenue
  4. Sales Tax Payable
6.

LO 5.1Which of these accounts would not be present in the closing entries?

  1. Utilities Expense
  2. Fees Earned Revenue
  3. Insurance Expense
  4. Dividends Payable
7.

LO 5.1Which of these accounts is never closed?

  1. Dividends
  2. Retained Earnings
  3. Service Fee Revenue
  4. Income Summary
8.

LO 5.1Which of these accounts is never closed?

  1. Prepaid Rent
  2. Income Summary
  3. Rent Revenue
  4. Rent Expense
9.

LO 5.1Which account would be credited when closing the account for fees earned for the year?

  1. Accounts Receivable
  2. Fees Earned Revenue
  3. Unearned Fee Revenue
  4. Income Summary
10.

LO 5.1Which account would be credited when closing the account for rent expense for the year?

  1. Prepaid Rent
  2. Rent Expense
  3. Rent Revenue
  4. Unearned Rent Revenue
11.

LO 5.2Which of these accounts is included in the post-closing trial balance?

  1. Sales Revenue
  2. Salaries Expense
  3. Retained Earnings
  4. Dividends
12.

LO 5.2Which of these accounts is not included in the post-closing trial balance?

  1. Land
  2. Notes Payable
  3. Retained Earnings
  4. Dividends
13.

LO 5.2On which of the following would the year-end Retained Earnings balance be stated correctly?

  1. Unadjusted Trial Balance
  2. Adjusted Trial Balance
  3. Post-Closing Trial Balance
  4. The Worksheet
14.

LO 5.2Which of these accounts is included in the post-closing trial balance?

  1. Supplies Expense
  2. Accounts Payable
  3. Sales Revenue
  4. Insurance Expense
15.

LO 5.3If current assets are $112,000 and current liabilities are $56,000, what is the current ratio?

  1. 200 percent
  2. 50 percent
  3. 2.0
  4. $50,000
16.

LO 5.3If current assets are $100,000 and current liabilities are $42,000, what is the working capital?

  1. 200 percent
  2. 50 percent
  3. 2.0
  4. $58,000
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