Accounting Chapter 20 – Flashcards
22 test answers
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T/F: The work sheet adjustments update the general ledger accounts
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false
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T/F: The sum of all the debit balances of the contra revenue, cost of merchandise, and expense accounts is the amount credited to Income Summary when recording the closing entry
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False
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T/F: The basic steps in the accounting cycle are not the same for all businesses.
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False
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T/F: The account balances that appear on the post-closing trial balance are the same as those on the balance sheet.
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True
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T/F: Four closing entries are required to close the temporary accounts for a merchandising business organized as a corporation
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False
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T/F : The source of information for the closing entries is the Balance Sheet section of the work sheet
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False
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T/F: After the closing entries have been posted, all of the permanent accounts will have zero balances
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False
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T/F: The temporary revenue account is closed by crediting it for its balance
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False
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T/F: The information for closing entries can be found on the Income Statement columns of the work sheet
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True
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T/F: Revenue accounts are closed when they are credited
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False
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T/F: All temporary accounts are closed into Income Summary
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True
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T/F: The Retained Earnings account is closed into the Capital account
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False
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T/F: Adjustments are prepared and posted before closing the books
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True
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T/F: After closing the books, the Income Summary account has a credit balance
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False
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T/F: Expense accounts are close by crediting them
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True
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T/F: To close Purchases Returns and Allowances and Sales Discounts will require a debit
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False
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T/F: After closing the ledger, only the permanent accounts have balances
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True
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T/F: The post closing trial balance is a list of temporary accounts
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False
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