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Final Review 7
Test Description: Review here
Instructions: Answer all questions to get your test result.
1) The balance sheet reports the final balances of the permanent accounts at the end of the fiscal period.
A
True
B
False
2) The balance of the revenue account is transferred to the ____.
A
credit side of the Income Summary account
B
debit side of the owner's withdrawals account
C
credit side of the owner's capital account
D
debit side of the Cash in Bank account
3) If a business has a net income for the period, the journal entry to close the balance of the Income Summary account is ____.
A
a debit to owner's capital, a credit to Fees.
B
a debit to Income Summary, a credit to owner's capital
C
a debit to Fees, a credit to owner's capital
D
a debit to owner's capital, a credit to Income Summary
4) Closing entries are used to transfer the net income or net loss for the accounting period to the ____.
A
Cash in Bank account
B
expense accounts
C
capital account
D
revenue account
5) ____ are the prices paid for goods or services used to operate a business.
A
owner's equity
B
investments
C
expenses
D
creditor
6) Assets = Liabilities + Owner's Equity is called the ____.
A
capital
B
accounting equation
C
revenue
D
business transaction
7) An economic event that causes a change in assets, liabilities, or owner's equity is called a(n) ____.
A
property rights
B
accounts receivable
C
accounting equation
D
business transaction
8) ____ is the amount of money owed to a business's creditors.
A
financial claims
B
accounts payable
C
owner's equity
D
accounts receivable
9) The total amount of money to be received in the future for goods or services sold on credit is the ____.
A
credit
B
accounts receivable
C
owner's equity
D
accounts payable
10) Anything of value that is owned or controlled by an individual or a business is called ____.
A
withdrawal
B
expenses
C
liabilities
D
property
11) The debts of a business are called its ____.
A
accounts payable
B
on account
C
creditor
D
liabilities
12) Any property or item of value owned by a business is a(n) ____.
A
credit
B
liabilities
C
capital
D
asset
13) The balance sheet is prepared before the statement of changes in owner's equity.
A
True
B
False
14) Financial reports are often prepared in pencil.
A
True
B
False
15) The income statement represents the basic accounting equation.
A
True
B
False
16) A net income will increase the owner's capital account.
A
True
B
False
17) The heading is the same on all three financial statements.
A
False
B
True
18) The revenue, expense, and the Income Summary accounts are included on the statement of changes in owner's equity.
A
True
B
False
19) The information on the statement of changes in owner's equity is used in preparing the income statement.
A
True
B
False
20) Net income or net loss is the difference between total revenue and total expenses over a specific period of time.
A
False
B
True
*select an answer for all questions
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