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The Income Summary account shows debits of $17,000 and credits of $12,000. This results in

The Income Summary account shows debits of $17,000 and credits of $12,000. This results in

The Income Summary account shows debits of $17,000 and credits of $12,000. This results in a

A) net income of $29,000.

B) net loss of $29,000.

C) net income of $5,000.

D) net loss of $5,000.

 

32) After closing the revenue, expense, and withdrawal accounts, the capital increased by $3,000. Which of the following situations could have occurred?

A) The company had a net income.

B) The owner invested an additional amount.

C) The owner made a withdrawal.

D) All of these answers are correct.

33) The income statement credit column of the worksheet showed the following revenues:

Catering Fees$700

Cleaning Fees 600

The journal entry to close the revenue accounts is:

A) Income Summary1,300

Catering Fees700

Cleaning Fees600

B) Catering Fees700

Cleaning Fees600

Income Summary1,300

C) Capital1,300

Income Summary1,300

D) Catering Fees700

Cleaning Fees 600

Capital1,300

 

34) The business failed to close any of the revenue accounts. The result of this error is that

A) revenues will be understated.

B) capital will be understated.

C) the assets will be overstated.

D) the liabilities will be overstated.

 

35) The entry to close the expense account(s) was entered in reverse?Income Summary was credited and the expense account(s) was/were debited. The result of this error is that

A) before closing it, Income Summary will have a credit balance.

B) before closing it, Income Summary will have a debit balance.

C) the assets will be overstated.

D) the liabilities will be overstated.

 

36) The entry to close the revenue account(s) was entered in reverse - Income Summary was  debited and the revenue account(s) was/were credited. The result of this error is that

A) before closing it, Income Summary will have a credit balance.

B) before closing it, Income Summary will have a debit balance.

C) the assets will be overstated.

D) the liabilities will be overstated.

37) The following normal account balances were found on the general ledger before closing entries were prepared:

 

Revenue$700Cash$500

Expenses$400Accounts Receivable$350

Capital$7,500Withdrawals$1,000

 

After closing entries are posted, what is the balance in the Revenue account?

A) $700

B) $0

C) $300

D) Closing entries do not affect Revenue.

 

38) The following normal account balances were found on the general ledger before closing entries were prepared:

 

Revenue$700Cash$500

Expenses$400Accounts Receivable$350

Capital$7,500Withdrawals$1,000

 

After closing entries are posted, what is the balance in the Capital account?

A) $7,800

B) $7,500

C) $6,800

D) Closing entries do not affect the Capital account.

 

39) The following normal account balances were found on the general ledger before closing entries were prepared:

 

Revenue$700Cash$500

Expenses$400Accounts Receivable$350

Capital$7,500Withdrawals$1,000

 

After closing entries are posted, what is the balance in the Cash account?

A) $800

B) $0

C) $300

D) Closing entries do not affect the Cash account.

40) The entry to close the Withdrawal account was entered in reverse - the Withdrawal account was debited and Capital credited. The result of this error is that

A) before closing it, Income Summary will have a credit balance.

B) before closing it, Income Summary will have a debit balance.

C) the end of period capital will be understated.

D) the end of period capital will be overstated.

Tripti 06-Dec-2019

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