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Which of the following accounts will NOT be involved in closing entries

Which of the following accounts will NOT be involved in closing entries?

a. Prepaid Insurance.

b. Service Revenue.

c. Utilities Expense.

d. Retained Earnings.

 

 

125. When a company prepares closing entries, which one of the following is NOT a correct closing entry?

a. Debit Retained Earnings; credit Salaries Expense.

b. Debit Dividends; credit Retained Earnings.

c. Debit Service Revenue; credit Retained earnings.

d. All of the above are correct.

 

 

126. In the first three years of operations, Lindsey Corporation earned net income/loss of -$150,000, $100,000, and $250,000. At the end of the third year, Lindsey Corporation has a balance of $120,000 in its Retained Earnings account. What is the total amount of dividends Lindsey Corporation paid over the three years?

a. $130,000.

b. $120,000.

c. $80,000.

d. $380,000.

 

 

127. For the first three years of operations, the company reports net income of $1,000, $2,000, and $3,000, and pays dividends of $500, $1,000, and $1,000.  What is the balance of retained earnings at the end of the third year?

a. $2,000.

b. $2,500.

c. $3,500.

d. $6,000.

 

 

128. Which of the following is true concerning temporary and permanent accounts?

a. Cash is a temporary account.

b. Permanent accounts represent activity over the entire life of the company.

c. Permanent accounts must be closed at the end of every reporting period.

d. Temporary accounts represent activity over the previous three years.

 

 

129. The ending balance of Retained Earnings can best be described as:

a. The amount of cash received from stockholders over the life of the company.

b. The amount of net income over the life of the company not paid to owners in the form of dividends.

c. The amount of dividends paid over the life of the company.

d. The amount of net income over the life of the company.

 

 

130. The closing entry for expenses includes:

a. A debit to Dividends and a credit to all expense accounts.

b. A debit to Retained Earnings and a credit to all expense accounts.

c. A debit to Revenues and a credit to Retained Earnings.

d. A debit to Revenues and a credit to all expense accounts.

 

 

131. The primary purpose of closing entries is to:

a. Prove the equality of the debit and credit entries in the general journal.

b. Ensure that all assets and liabilities are recognized in the appropriate period.

c. Update the balance of Retained Earnings and prepare revenue, expense, and dividend accounts for next period’s transactions.

d. Assure that adjusting entries balance.

 

 

132. The following table contains financial information for Fisher Inc. before closing entries:

Cash

$23,000

Common Stock

34,000

Supplies

  4,000

Advertising Expense

  2,000

Accounts Payable

20,000

Service Revenue

30,000

Salaries Expense

  3,000

Prepaid Rent

  4,000

Dividends

  3,000

Equipment

45,000

How many of the above accounts are permanent?

a. Three.

b. Four.

c. Five.

d. Six.

 

 

133. Permanent accounts would not include:

a. Interest Expense.

b. Salaries Payable.

c. Prepaid Rent.

d. Unearned Revenues.

Jan 27 2020 View more View Less

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