Chapter 3 Smartbook ACCT Exam #1 Questions with Correct
Answers
Explain your understanding of the closing process by choosing the correct
statements below. - ✔✔1. The closing process helps to summarize a period's
revenues and expenses
2. The closing process resets the balances in temporary accounts to zero
A company had the following selected balances. The first closing journal entry
would include which of the following. - ✔✔A credit to Income Summary for $6000
The required adjusting entry would be to debit the interest ______ account and
____ the interest ____- account - ✔✔expense
credit
payable
Place the steps in the adjusting process in the correct order in which they would
be performed. - ✔✔1. Determine what the current account balance is
2. Determine what the correct account balance should be.
3. Record an adjusting entry
An adjusting journal entry is made at the ____ of an accounting period. - ✔✔end
List the order in which financial statements are prepared. - ✔✔1. Income
statement
2. Statement of retained earnings
3. Balance Sheet
, 4. Statement of cash flows
in order to prepare an income statement using the account balances on an
adjusted trial balance all of the (revenues/liabilities) and their credit balances are
transferred to the income statement as well as all of the (expenses/assets) and
their (debit/credit) balances. - ✔✔revenues
expenses
debit
Current assets are: - ✔✔cash and other resources that are expected to be sold,
collected or used Within one year
The Income Summary account can be defined as which of the following? (Check
all that apply.) - ✔✔An account that contains a credit for the sum of all revenues
An account whose balance equals net income or net loss
An account used during the closing process
A temporary account
Choose the statement below that explains what "closing" means - ✔✔Closing
means to bring an account balance to zero
The income summary account is ____ (debited/credited) for the sum of all
revenue accounts and is ____ (debited/credited) for the sum of all expense
accounts and its balance will be transferred to the ____ (Retained earnings/ cash)
account. - ✔✔credited
debited
retained earnings
Answers
Explain your understanding of the closing process by choosing the correct
statements below. - ✔✔1. The closing process helps to summarize a period's
revenues and expenses
2. The closing process resets the balances in temporary accounts to zero
A company had the following selected balances. The first closing journal entry
would include which of the following. - ✔✔A credit to Income Summary for $6000
The required adjusting entry would be to debit the interest ______ account and
____ the interest ____- account - ✔✔expense
credit
payable
Place the steps in the adjusting process in the correct order in which they would
be performed. - ✔✔1. Determine what the current account balance is
2. Determine what the correct account balance should be.
3. Record an adjusting entry
An adjusting journal entry is made at the ____ of an accounting period. - ✔✔end
List the order in which financial statements are prepared. - ✔✔1. Income
statement
2. Statement of retained earnings
3. Balance Sheet
, 4. Statement of cash flows
in order to prepare an income statement using the account balances on an
adjusted trial balance all of the (revenues/liabilities) and their credit balances are
transferred to the income statement as well as all of the (expenses/assets) and
their (debit/credit) balances. - ✔✔revenues
expenses
debit
Current assets are: - ✔✔cash and other resources that are expected to be sold,
collected or used Within one year
The Income Summary account can be defined as which of the following? (Check
all that apply.) - ✔✔An account that contains a credit for the sum of all revenues
An account whose balance equals net income or net loss
An account used during the closing process
A temporary account
Choose the statement below that explains what "closing" means - ✔✔Closing
means to bring an account balance to zero
The income summary account is ____ (debited/credited) for the sum of all
revenue accounts and is ____ (debited/credited) for the sum of all expense
accounts and its balance will be transferred to the ____ (Retained earnings/ cash)
account. - ✔✔credited
debited
retained earnings
