Financial - MP 2 Quarterly Review

Mia is reviewing the financial statements of her company and comes across the term 'accumulated depreciation'. She wonders, what type of account is accumulated depreciation?

• temporary

• liability

• permanent

• stockholders’ equity

Elijah is preparing the financial statements for his small business. He needs to know: The income summary account is closed to which account?

• stockholders’ equity

• retained earnings

• dividends

• closing expense

Ethan received payment in advance for services he has not yet performed. Where should this unearned fee appear on the financial statements?

• balance sheet in the current assets section

• balance sheet as a current liability

• balance sheet in the stockholders’ equity section

• income statement as revenue

Where would you classify prepaid expenses on a balance sheet?

• current liability

• fixed asset

• current asset

• long-term liability

When should the statement of retained earnings be prepared in relation to the financial statements?

• before the balance sheet and after the income statement

• before the income statement and after the balance sheet

• before the income statement and balance sheet

• after the income statement and the balance sheet

Income Summary appears on which financial statement?

• retained earnings

• income statement

• balance sheet

• it doesn't appear on a financial statement

Carousel Corp paid $9,600 for a two-year property insurance policy on April 1 and recorded it as a prepaid expense. What amount would be recorded for the adjusting entry to the Insurance Expense account on April 30?

• $9,600

• $400

• $800

• $8,800

Which account is closed by posting a credit to the account?

• Prepaid Insurance

• Sales

• Rent Expense

• Retained Earnings

Nora runs a small business and at the end of the fiscal year, she needs to close certain accounts to the Income Summary. Which of the following accounts should she close?

• Sales

• Accumulated Depreciation - Equipment

• Supplies

• Unearned Rent

Which of the following accounts appears in the post-closing trial balance?

• Sales

• Supplies

• Rent Expense

• Dividends