Chapter 6 Quiz Review – Flashcards

One purpose of closing entries is to A) transfer the results of operations to owner's equity. B) reduce the owner's capital account balance to zero so that the account is ready for the next period. C) close all accounts so that the ledger is ready for the next accounting period. D) adjust the ledger account balances to provide complete and accurate figures for use on financial statements.

The Fees Income account is closed by A) debiting Cash and crediting Fees Income. B) debiting Fees Income and crediting Income Summary. C) debiting the owner's capital account and crediting Fees Income. D) debiting Income Summary and crediting Fees Income.

The owner's drawing account is closed by A) debiting the owner's drawing account and crediting the owner's capital account. B) debiting the owner's capital account and crediting the owner's drawing account. C) debiting Income Summary and crediting the owner's drawing account. D) debiting the owner's drawing account and crediting Income Summary.

Which of the following accounts would be closed? A. Supplies Expense B. Accounts receivable C. Supplies D. Accumulated Depreciation

The entry to close the Income Summary account may include A) a debit to Income Summary and a credit to the owner's capital account. B) a debit to Income Summary and a credit to Cash. C) a debit to Cash and a credit to Income Summary. D) a debit to Income Summary and a credit to the owner's drawing account.

The entry to transfer a net loss to the owner's capital account would include a debit to A) the owner's capital account and a credit to Cash. B) the owner's drawing account and a credit to the owner's capital account. C) Income Summary and a credit to the owner's capital account. D) the owner's capital account and a credit to Income Summary.

After the closing entries are posted to the ledger, each expense account will have A) A credit account B) A debit balance C) Either a debit or a credit balance D) None of the above

Which of the following accounts will appear on the post-closing trial balance? A) The owner's drawing account B) Fees Income C) The owner's capital account D) Rent Expense

Which of the following statements about the interpretation of the financial statements is not correct? A) Interpreting the financial statements can only be performed by auditors. B) Interpreting the financial statements is the final step in the accounting cycle. C) To interpret the financial statements means to understand and explain the meaning and importance of information in accounting reports. D) All of the above statements are correct.

Which of the following statements is not correct? A. The audit trial should be used to trace data through the accounting records to find and correct errors B. If the post closing trial balance does not balance, there are errors in the accounting records. C. The balance of the owners capital account on the adjusted trial balance will ordinarily be different then that reported on the post closing trial balance. D. The balance of the owners capital account, as reflected on the post closing trial balance, will match the amount reported on the income statement.