Multiple choice questions on basic accounting principle.
1. The income summary account is also called
A. the dosing account
B. the clearing account
C. the nominal account
D. the temporary account
2. Which of the following account groups are all considered nominal accounts?
A. Cash, Fees Earned, Unearned Revenues
B. Prepaid Expenses, Unearned Revenues, Fees Earned
C. Capital Account, Drawing Account, Income Summary
D. Drawing Account, Fees Earned, Rent Expense
3. All of the closing entries will adjust to update that account.
A. the drawing account
B. the capital account
C. the cash account
D. the income summary account
4. The entry to close the appropriate Insurance account at the end of the accounting period is.:
A. debIt Income Summary; credit Prepaid Insurance
B. debit Prepaid Insurance; credit Income Summary
C. debit Insurance Expense; credit Income Summary
D. debit Income Summary; credit Insurance Expense
5. Red Rock Stone purchased a one-year liability insurance policy on January 1st of this year for $3,600 and recorded It as a prepaid expense. From the selections of a. through d., select the value that would be utilized in the closing entry for insurance expense and prepaid insurance during the closing process at the end of the first fiscal period on January 31st.
A. $3,600
B. $36
C.$300
D. $360
6. The fiscal year selected by companies __________
A. is the same as the calendar year
B. begins with the first day of the month and ends on the last day of the twelfth month
C. must always begin on January 1
D. will change each year
7. A net loss appears on the work sheet In the
A. debit column of the Balance Sheet columns
B. credit column of the Balance Sheet columns
C. debit column of the Income Statement columns
D. credit column of the Adjustments columns
8. Joby owns & operate a business. On Jan. 1, 2007 Joby , capital had a balance of $550,600. During the year Joby invested an additional $50,000 and withdrew $40,000. For the year ended Dec. 31,2007, the business reported a net income of $68,150. What is the ending for the Capital balance?
A. $600,600
B. $500,600
C. $628,750
D. $668,750
9. What type of account is Unearned Service Fees?
A. Current Asset
B. Current Uabihty
C. Long-Term Liability
D. Plant, Property & Equipment
10. What type of account is Prepaid Rent?
A. Current Asset
B. Current Liability
C. Long-Term Uabillty
D. Plant, Property, & Equipment