Strayer University ACC 100 Exam 2 (pdf) | 2026/2027 | Accounting I
Q&A | Accounting
1. Which of the following is the correct order of steps in the accounting
cycle?
A) Journalize, Post, Prepare unadjusted trial balance, Adjust, Prepare adjusted
trial balance, Prepare financial statements, Close
B) Post, Journalize, Prepare unadjusted trial balance, Adjust, Prepare financial
statements, Close
C) Journalize, Adjust, Post, Prepare unadjusted trial balance, Prepare financial
statements, Close
D) Prepare financial statements, Journalize, Post, Adjust, Close
Correct Answer: Journalize, Post, Prepare unadjusted trial balance, Adjust,
Prepare adjusted trial balance, Prepare financial statements, Close
Rationale: The accounting cycle is a series of steps performed during each
accounting period to prepare financial statements. After analyzing
transactions, the steps are: journalize transactions, post to ledger accounts,
prepare an unadjusted trial balance, journalize and post adjusting entries,
prepare an adjusted trial balance, prepare financial statements, and
journalize and post closing entries . Worksheets may be used as an
intermediate step in this process.
2. A journal is best described as a:
A) Book of final entry
B) Book of original entry
C) Collection of all accounts
D) Summary of financial statements
Correct Answer: Book of original entry
,Rationale: A journal is the book of original entry where transactions are first
recorded in chronological order before being posted to the ledger . This is
why it is often called the "book of original entry." The ledger is the book of
final entry where all accounts are maintained.
3. The posting process refers to:
A) Recording transactions in the journal
B) Transferring amounts from the journal to the ledger
C) Preparing financial statements from the trial balance
D) Closing temporary accounts at year-end
Correct Answer: Transferring amounts from the journal to the ledger
Rationale: The posting process is the transfer of amounts from the journal to
the appropriate accounts in the general ledger . This step follows journalizing
and ensures that all journal entries are systematically recorded in individual
ledger accounts.
4. A trial balance is prepared to:
A) Ensure the ledger accounts contain no errors
B) Check the arithmetical accuracy of the double-entry system
C) Indicate the areas where errors have occurred
D) Prevent errors from occurring
Correct Answer: Check the arithmetical accuracy of the double-entry system
Rationale: The trial balance is a statement of all ledger accounts and their
balances, prepared to verify that total debits equal total credits . It checks
the arithmetical accuracy of the double-entry system but does not guarantee
,that no errors exist (e.g., errors of omission, compensating errors, or errors of
principle may still occur).
5. Which of the following accounts is NOT considered a temporary (nominal)
account?
A) Service Revenue
B) Salaries Expense
C) Dividends
D) Accounts Receivable
Correct Answer: Accounts Receivable
Rationale: Temporary (nominal) accounts include revenue, expense, and
dividend accounts that are closed to retained earnings at the end of each
accounting period . Accounts Receivable is a permanent (real) account (an
asset) and its balance is carried forward to the next period.
6. The closing entry for a company with Service Revenue of $136,700 is:
A) Debit Service Revenue $136,700; Credit Retained Earnings $136,700
B) Debit Retained Earnings $136,700; Credit Service Revenue $136,700
C) Debit Service Revenue $136,700; Credit Income Summary $136,700
D) Debit Cash $136,700; Credit Service Revenue $136,700
Correct Answer: Debit Service Revenue $136,700; Credit Retained Earnings
$136,700
Rationale: Revenue accounts have credit balances and are closed by debiting
the revenue account and crediting Retained Earnings (or Income Summary) .
This transfers the revenue balance to retained earnings, reducing the
revenue account to zero.
, 7. Which of the following is NOT a step in the closing process?
A) Close revenue accounts to Income Summary
B) Close expense accounts to Income Summary
C) Close Income Summary to Retained Earnings
D) Close Assets to Retained Earnings
Correct Answer: Close Assets to Retained Earnings
Rationale: Asset accounts are permanent accounts and are never closed. The
four closing entries are: (1) close all revenue accounts to Income Summary,
(2) close all expense accounts to Income Summary, (3) close Income
Summary to Retained Earnings, and (4) close Dividends to Retained Earnings
.
8. At the start of the year, a business had paid $4,500 rent in advance.
During the year, it paid $12,000 in rent. At the end of the year, $1,500 was
prepaid. What was the annual rent expense?
A) $9,000
B) $12,000
C) $15,000
D) $18,000
Correct Answer: $15,000
Rationale: Rent expense for the year is calculated as: Beginning prepaid rent
+ Rent paid during the year - Ending prepaid rent = $4,500 + $12,000 -
$1,500 = $15,000 . This represents the amount of rent actually used or
incurred during the year.
Q&A | Accounting
1. Which of the following is the correct order of steps in the accounting
cycle?
A) Journalize, Post, Prepare unadjusted trial balance, Adjust, Prepare adjusted
trial balance, Prepare financial statements, Close
B) Post, Journalize, Prepare unadjusted trial balance, Adjust, Prepare financial
statements, Close
C) Journalize, Adjust, Post, Prepare unadjusted trial balance, Prepare financial
statements, Close
D) Prepare financial statements, Journalize, Post, Adjust, Close
Correct Answer: Journalize, Post, Prepare unadjusted trial balance, Adjust,
Prepare adjusted trial balance, Prepare financial statements, Close
Rationale: The accounting cycle is a series of steps performed during each
accounting period to prepare financial statements. After analyzing
transactions, the steps are: journalize transactions, post to ledger accounts,
prepare an unadjusted trial balance, journalize and post adjusting entries,
prepare an adjusted trial balance, prepare financial statements, and
journalize and post closing entries . Worksheets may be used as an
intermediate step in this process.
2. A journal is best described as a:
A) Book of final entry
B) Book of original entry
C) Collection of all accounts
D) Summary of financial statements
Correct Answer: Book of original entry
,Rationale: A journal is the book of original entry where transactions are first
recorded in chronological order before being posted to the ledger . This is
why it is often called the "book of original entry." The ledger is the book of
final entry where all accounts are maintained.
3. The posting process refers to:
A) Recording transactions in the journal
B) Transferring amounts from the journal to the ledger
C) Preparing financial statements from the trial balance
D) Closing temporary accounts at year-end
Correct Answer: Transferring amounts from the journal to the ledger
Rationale: The posting process is the transfer of amounts from the journal to
the appropriate accounts in the general ledger . This step follows journalizing
and ensures that all journal entries are systematically recorded in individual
ledger accounts.
4. A trial balance is prepared to:
A) Ensure the ledger accounts contain no errors
B) Check the arithmetical accuracy of the double-entry system
C) Indicate the areas where errors have occurred
D) Prevent errors from occurring
Correct Answer: Check the arithmetical accuracy of the double-entry system
Rationale: The trial balance is a statement of all ledger accounts and their
balances, prepared to verify that total debits equal total credits . It checks
the arithmetical accuracy of the double-entry system but does not guarantee
,that no errors exist (e.g., errors of omission, compensating errors, or errors of
principle may still occur).
5. Which of the following accounts is NOT considered a temporary (nominal)
account?
A) Service Revenue
B) Salaries Expense
C) Dividends
D) Accounts Receivable
Correct Answer: Accounts Receivable
Rationale: Temporary (nominal) accounts include revenue, expense, and
dividend accounts that are closed to retained earnings at the end of each
accounting period . Accounts Receivable is a permanent (real) account (an
asset) and its balance is carried forward to the next period.
6. The closing entry for a company with Service Revenue of $136,700 is:
A) Debit Service Revenue $136,700; Credit Retained Earnings $136,700
B) Debit Retained Earnings $136,700; Credit Service Revenue $136,700
C) Debit Service Revenue $136,700; Credit Income Summary $136,700
D) Debit Cash $136,700; Credit Service Revenue $136,700
Correct Answer: Debit Service Revenue $136,700; Credit Retained Earnings
$136,700
Rationale: Revenue accounts have credit balances and are closed by debiting
the revenue account and crediting Retained Earnings (or Income Summary) .
This transfers the revenue balance to retained earnings, reducing the
revenue account to zero.
, 7. Which of the following is NOT a step in the closing process?
A) Close revenue accounts to Income Summary
B) Close expense accounts to Income Summary
C) Close Income Summary to Retained Earnings
D) Close Assets to Retained Earnings
Correct Answer: Close Assets to Retained Earnings
Rationale: Asset accounts are permanent accounts and are never closed. The
four closing entries are: (1) close all revenue accounts to Income Summary,
(2) close all expense accounts to Income Summary, (3) close Income
Summary to Retained Earnings, and (4) close Dividends to Retained Earnings
.
8. At the start of the year, a business had paid $4,500 rent in advance.
During the year, it paid $12,000 in rent. At the end of the year, $1,500 was
prepaid. What was the annual rent expense?
A) $9,000
B) $12,000
C) $15,000
D) $18,000
Correct Answer: $15,000
Rationale: Rent expense for the year is calculated as: Beginning prepaid rent
+ Rent paid during the year - Ending prepaid rent = $4,500 + $12,000 -
$1,500 = $15,000 . This represents the amount of rent actually used or
incurred during the year.
