WorksheetsDay 4 Quiz Bank – Chapter 3 Wrap-Up + Review
Total questions: 20
Worksheet time: 10hrs 0mins
Which of the following is a temporary account?
Accounts Payable
Dividends
Common Stock
Cash
Which accounts remain open after closing?
Assets, Liabilities, Equity
Revenues and Expenses
Dividends and Revenues
Temporary accounts
Which of the following appears on a classified balance sheet as a current asset?
Equipment
Accounts Receivable
Common Stock
Notes Payable (5 years)
The post-closing trial balance includes which types of accounts?
Revenues and Expenses
Dividends only
Assets, Liabilities, and Stockholders’ Equity
All accounts with balances
Which statement about temporary accounts is TRUE?
They are carried forward into the next period
They are closed to retained earnings at year-end
They include assets and liabilities
They are listed in the post-closing trial balance
Closing entries are made to:
Transfer net income and dividends to retained earnings
Eliminate permanent accounts
Prepare financial statements
Record adjusting entries
If a company wants to ensure that only permanent accounts remain open at the end of the period, which process should it perform?
Prepare adjusting entries
Post closing entries
Prepare a bank reconciliation
Record transactions
A student is reviewing the post-closing trial balance. Which of the following accounts should NOT appear on it?
Cash
Accounts Payable
Service Revenue
Common Stock
Why are dividends considered a temporary account?
They are reported on the balance sheet
They are closed at the end of the period to retained earnings
They represent a permanent reduction in assets
They are always zero
Which of the following best explains why revenues and expenses are closed at the end of the accounting period?
To prepare for the next period’s transactions
To update the balance of retained earnings
To eliminate permanent accounts
To record adjusting entries
A company has the following accounts after closing: Cash, Equipment, Accounts Payable, and Common Stock. Which type of accounts have been closed?
Permanent accounts
Temporary accounts
Asset accounts
Liability accounts
If a company forgets to close its revenue accounts, what is the likely impact on the next period’s financial statements?
Overstated revenues
Understated assets
Overstated liabilities
No impact
A student is preparing closing entries. Which account should be credited to close the Dividends account?
Dividends
Retained Earnings
Common Stock
Cash
Which of the following is the correct sequence of steps in the closing process?
Close revenues, close expenses, close dividends, prepare post-closing trial balance
Prepare post-closing trial balance, close revenues, close expenses, close dividends
Close expenses, close revenues, close dividends, prepare post-closing trial balance
Close dividends, close revenues, close expenses, prepare post-closing trial balance
A company’s post-closing trial balance includes only asset, liability, and equity accounts. What does this indicate about the company’s closing process?
The closing process was incomplete
All temporary accounts have been closed properly
Adjusting entries were not made
Dividends were not recorded
A company’s accountant is reviewing the classified balance sheet and notices that Notes Payable (5 years) is listed under current liabilities. What correction should be made?
Move Notes Payable (5 years) to long-term liabilities
Move Notes Payable (5 years) to current assets
Move Notes Payable (5 years) to equity
No correction is needed
Suppose a company accidentally includes Service Revenue in its post-closing trial balance. What is the most likely reason for this error?
The Service Revenue account was not closed
The company has no permanent accounts
The company has no revenue
The company closed all accounts correctly
A business wants to ensure that its retained earnings reflect all activity for the period. Which step is most critical in achieving this?
Preparing adjusting entries
Closing all temporary accounts to retained earnings
Preparing a bank reconciliation
Posting transactions to the ledger
If a company fails to close its expense accounts, what effect will this have on the next period’s net income calculation?
Net income will be understated
Net income will be overstated
Net income will not be affected
Net income will be zero
A student is analyzing the effect of closing entries on the accounting equation. Which statement best describes the impact?
Closing entries do not affect total assets, liabilities, or equity; they only reclassify within equity
Closing entries increase total assets
Closing entries decrease total liabilities
Closing entries increase total equity
