Acct. II Ch. 22 Test Review

If a company does not use reversing entries, the last step in its accounting cycle is to prepare a post-closing trial balance.

• True

• False

Dividends decrease the earnings retained by a corporation.

• True

• False

If a company has a net income, the entry to close the Income Summary account includes a debit to Income Summary.

• True

• False

Paying cash for office equipment is an example of a financing activity.

• True

• False

The net income of a corporation increases retained earnings.

• True

• False

The issuance of bonds payable is an example of an investing activity.

• True

• False

The adjusted trial balance is used to prepare financial statements.

• True

• False

Paying cash dividends is an example of a financing activity.

• True

• False

Receiving cash from interest income is an example of an operating activity.

• True

• False

The adjusted trial balance is used to prepare financial statements.

• True

• False