Learning Objective B-4
1) Which of the following will cause the unadjusted trial balance to be out of balance?
A) The temporary accounts were not closed.
B) An adjusting entry to record the $2,000 of unearned revenue now earned was recorded as a debit to Unearned revenue and a debit to Revenue.
C) The permanent accounts were not closed.
D) All of these will cause the unadjusted trial balance to be out of balance.
2) Adjusting entries ________.
A) are prepared to prove that debits equal credits
B) are prepared after financial statements are prepared
C) get the temporary accounts ready for the next accounting period
D) are recorded after the unadjusted trail balance is prepared
3) Which of the following accounts are permanent accounts?
A) Common stock
B) Accounts payable
C) Accumulated depreciation
D) All of these are permanent accounts.
4) Which of the following accounts are temporary accounts?
A) Common stock
B) Accumulated depreciation
C) Depreciation expense
D) All of these are permanent accounts.
5) Which of the following accounts are temporary accounts?
A) Unearned revenue
B) Accounts receivable
C) Cash
D) Sales
6) Which of the following accounts are temporary accounts?
A) Prepaid insurance
B) Insurance expense
C) Accounts payable
D) Retained earnings
7) Which of the following accounts are permanent accounts?
A) Dividends
B) Insurance expense
C) Revenue
D) Retained earnings
8) T Ball, Inc. has the following accounts on its adjusted trial balance at December 31:
|
Debit
|
Credit
|
Cash
|
$ 700
|
|
Accounts receivable
|
300
|
|
Insurance expense
|
100
|
|
Equipment
|
800
|
|
Accumulated depreciation
|
|
$ 400
|
Depreciation expense
|
200
|
|
Sales
|
|
1,000
|
Wages expense
|
400
|
|
Common stock
|
|
1,000
|
Dividends
|
100
|
|
Retained earnings
|
|
200
|
How many of these accounts are temporary accounts and will be closed at the end of the account period?
A) Seven
B) Six
C) Five
D) Four
9) Closem, Inc. has the following accounts with normal balances on its adjusted trial balance at
Cash
|
$3,800
|
Unearned revenue
|
300
|
Insurance expense
|
200
|
Truck
|
1,000
|
Accumulated depreciation
|
300
|
Depreciation expense
|
100
|
Sales
|
1,000
|
Salary expense
|
400
|
Common stock
|
3,000
|
Dividends
|
100
|
Retained earnings
|
1,000
|
What will be the Retained earnings balance on the postclosing trial balance after closing the temporary accounts listed above?
A) $5,500
B) $1,200
C) $1,500
D) $200
10) Closing entries are posted to the general ledger prior to posting adjusting entries.