Question

1. The use of reversing entries is:

a) required

b) required whenever adjusting entries are omitted

c)optional

d)optional unless computerized accounting systems are used

2. Which of the following accounts should be closed to Income Summary at the end of the fiscal year?

a) Service Revenue

b) Equipment

c) Prepaid Insurance

d) Unearned Rent

3. After all of the account balances have been extended to the Balance Sheet columns of the ned-of-period spreadsheet, the totals of the debit and credit columns are $36,755 and $32,735, respectively. What is the amount of net income or net loss for the period?

a) $4,020 net income

b) $36,755 net loss

c) $4,020 net loss

d)$32,735 net income

4. The balance sheet should be prepared

a) before the income statement and the retained earnings statement

b) before the income statement and after the retained earnings statement

c) after the income statement and the retained earnings statement

d) after the income statement and before the retained earnings statement

Answer 1

1. The use of reversing entries is Optional 2. Service Revenue closed in Income Summary Equipment is related to Balance Sheet Prepaid Insurance is related to Balance sheet Unearned Rent is related to Balance Sheet 3. Total Debit balance - Total Credit Balance = Net Income =36755-32735 =4020 Net Income 4. Balance sheet should be prepared after Income statement and retained earnings statement