ACG 2021 Study Guide - Midterm Guide: General Ledger, Capital Account, Trial Balance

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28 Nov 2019
The information for preparing a trial balance on a work sheet is obtained from
general ledger accounts.
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.
40. If the total debit column exceeds the total credit column of the income statement columns on a work sheet,
then the company has
c. suffered a net loss for the period.
47. Assuming that there is a net loss for the period, debits equal credits in all but which section of the work sheet?
a. Income statement columns
48. Adjusting entries are prepared from
b. the adjustment columns of the work sheet.
50. The work sheet does not show
c. the ending balance in the owner's capital account.
If the total debits exceed total credits in the balance sheet columns of the work sheet, owner's equity
a. will increase because net income has occurred.
Income Statement Balance Sheet
Dr. Cr. Dr. Cr.
Totals $58,000 $50,000 $34,000 $42,000
52. The net income (or loss) for the period is
c. $8,000 loss.
53. To enter the net income (or loss) for the period into the above work sheet requires an entry to the
b. income statement credit column and to the balance sheet debit column.
54. Closing entries are made
c. in order to transfer net income (or loss) and owner's drawing to the owner's capital account.
55. Closing entries are
d. journalized in the general journal.
56. The income summary account
d. is a temporary account.
57. 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
c. credit to the owner's capital account.
58. Closing entries are journalized and posted
b. after the financial statements are prepared.
59. Closing entries
c. cause the revenue and expense accounts to have zero balances.
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60. Which of the following is a true statement about closing the books of a proprietorship?
c. Revenues and expenses are closed to the Income Summary account.
61. Closing entries may be prepared from all but which one of the following sources?
c. Balance sheet
62. In order to close the owner's drawing account, the
d. owner's capital account should be debited.
63. In preparing closing entries
b. each expense account will be credited.
64. The most efficient way to accomplish closing entries is to
d. credit the income summary account for total revenues and debit the income summary account for
total expenses.
65. The closing entry process consists of closin
d. all temporary accounts.
66. The final closing entry to be journalized is typically the entry that closes the
b. owner's drawing account.
67. An error has occurred in the closing entry process if
d. the balance sheet accounts have zero balances.
68. The Income Summary account is an important account that is used
c. annually in preparing closing entries.
69. 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.
70. After closing entries are posted, the balance in the owner's capital account in the ledger will be equal to
b. the amount of the owner's capital reported on the balance sheet.
71. A post-closing trial balance will show
a. only permanent account balances.
72. A post-closing trial balance should be prepared
b. after closing entries are posted to the ledger accounts.
73. A post-closing trial balance will show
c. only balance sheet accounts.
74. The purpose of the post-closing trial balance is to
b. prove the equality of the balance sheet account balances that are carried forward into the next
accounting period.
75. The balances that appear on the post-closing trial balance will match the
b. balance sheet account balances after closing entries.
76. Which account listed below would be double ruled in the ledger as part of the closing process?
c. Owner's Drawing
77. A double rule applied to accounts in the ledger during the closing process implies that
a. the account is an income statement account.
78. The heading for a post-closing trial balance has a date line that is similar to the one found on
a. a balance sheet.
79. Which one of the following is an optional step in the accounting cycle of a business enterprise?
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