71. If monthly financial statements are desired by management:
A. Journalizing and posting adjusting entries must be done each month.
B. Journalizing and posting closing entries must be done each month.
C. Monthly financial statements can be prepared from worksheets; adjustments and closing entries need not be entered in the accounting records.
D. Adjusting and closing entries must be entered in the accounting records before preparation of interim financial statements.
72. Declaring a dividend will:
A. Increase net income.
B. Decrease net income.
C. Not change net income.
D. Increase the net worth of a company.
73. Dividends will have what effect upon retained earnings?
A. Increase.
B. Decrease.
C. No effect.
D. Depends upon if there is income or loss.
74. Which of the following accounts will be closed to Income Summary?
A. Prepaid Expenses.
B. Unearned Revenue.
C. Dividends.
D. None of the above.
75. Net income from the Income Statement appears on:
A. The Balance Sheet.
B. The Retained Earnings Statement.
C. Neither the Balance Sheet nor the Retained Earnings Statement.
D. Both the Balance Sheet and the Retained Earnings Statement.
76. Which statement is true regarding the Income Statement?
A. Losses do not appear on income statements.
B. Dividends reduce net income.
C. Both A and B are true.
D. Both A and B are false.
77. Which of the following items should not be disclosed in the body of the financial statements, but rather in the notes to the financial statements?
A. Lawsuits, under certain circumstances.
B. Significant events occurring after the balance sheet date but before the financial statements are issued.
C. Neither A nor B
D. Both A & B
78. Closing entries should be made:
A. Every year.
B. Only when an entity goes out of business.
C. Only if there is a profit.
D. Only if there is a loss.
79. Which accounts should be closed?
A. Expenses and revenues.
B. Dividends.
C. Income summary.
D. Each of the above accounts should be closed.
80. Which account appears on the After-Closing Trial Balance?
A. Service Revenue.
B. Unearned Revenue.
C. Dividends.
D. Retained Earnings, Beginning of Year.