Accounting Cycle Quiz topic 4

What is the purpose of the adjusted trial balance?

• To record the closing entries for temporary accounts

• To prepare the financial statements

• To verify the equality of the total debit and credit balances before the financial statements are prepared

• To calculate the depreciation expense

Which of the following is a temporary account?

• Accounts Payable

• Income Summary

• Owner’s equity

• Land

What is the purpose of the closing process in accounting?

• To transfer the balances of temporary accounts to permanent accounts

• To record the adjusting entries

• To calculate the adjusted trial balance

• To prepare the financial statements

Which of the following accounts requires an adjusting entry?

• Cash

• Prepaid Rent

• Wages Expense

• Land

What is the purpose of the fiscal year in accounting?

• To calculate the depreciation expense

• To report the amounts for only one period

• To verify the equality of the total debit and credit balances

• To adopt an annual accounting period

What is the nature of the adjusting process in accounting?

• To report the amounts for only one period

• To analyze and update accounts at the end of the period

• To prepare the financial statements

• To record the closing entries for temporary accounts

Which of the following accounts is a current liability?

• Cash

• Notes Receivable

• Notes Payable (due in 10 years)

• Land

What is the purpose of the income summary account in the closing process?

• To calculate the depreciation expense

• To transfer the balances of temporary accounts to permanent accounts

• To verify the equality of the total debit and credit balances

• To close the temporary accounts

What is the purpose of the Statement of Financial Position?

• To report the financial position of a business at a specific point in time

• To report the amounts for only one period

• To prepare the financial statements

• To verify the equality of the total debit and credit balances

Which of the following accounts is a permanent account?

• Unearned Rent (three months)

• Accumulated Depreciation—Equipment

• Wages Payable

• Income Summary