Question : Multiple Choice Questions 61. Another name for temporary accounts is: A. Real accounts. B. Contra accounts. C. Accrued : 1225802

Multiple Choice Questions

61. Another name for temporary accounts is: 

A. Real accounts.

B. Contra accounts.

C. Accrued accounts.

D. Balance column accounts.

E. Nominal accounts.

62. When closing entries are made: 

A. All ledger accounts are closed to start the new accounting period.

B. All temporary accounts are closed but not the permanent accounts.

C. All real accounts are closed but not the nominal accounts.

D. All permanent accounts are closed but not the nominal accounts.

E. All balance sheet accounts are closed.

63. Revenues, expenses, and withdrawals accounts, which are closed at the end of each accounting period are: 

A. Real accounts.

B. Temporary accounts.

C. Closing accounts.

D. Permanent accounts.

E. Balance sheet accounts.

64. Which of the following statements is incorrect? 

A. Permanent accounts is another name for nominal accounts.

B. Temporary accounts carry a zero balance at the beginning of each accounting period.

C. The Income Summary account is a temporary account.

D. Real accounts remain open as long as the asset, liability, or equity items recorded in the accounts continue in existence.

E. The closing process applies only to temporary accounts.

65. Assets, liabilities, and equity accounts are not closed; these accounts are called: 

A. Nominal accounts.

B. Temporary accounts.

C. Permanent accounts.

D. Contra accounts.

E. Accrued accounts.

66. Closing the temporary accounts at the end of each accounting period does all of the following except: 

A. Serves to transfer the effects of these accounts to the owner’s capital account on the balance sheet.

B. Prepares the withdrawals account for use in the next period.

C. Gives the revenue and expense accounts zero balances.

D. Has no effect on the owner’s capital account.

E. Causes owner’s capital to reflect increases from revenues and decreases from expenses and withdrawals.

67. Journal entries recorded at the end of each accounting period to prepare the revenue, expense, and withdrawals accounts for the upcoming period and to update the owner’s capital account for the events of the period just finished are referred to as: 

A. Adjusting entries.

B. Closing entries.

C. Final entries.

D. Work sheet entries.

E. Updating entries.

68. The closing process is necessary in order to: 

A. calculate net income or net loss for an accounting period.

B. ensure that all permanent accounts are closed to zero at the end of each accounting period.

C. ensure that the company complies with state laws.

D. ensure that net income or net loss and owner withdrawals for the period are closed into the owner’s capital account.

E. ensure that management is aware of how well the company is operating.

69. Closing entries are required: 

A. if management has decided to cease operating the business.

B. only if the company adheres to the accrual method of accounting.

C. if a company’s bookkeeper forgets to prepare reversing entries.

D. if the temporary accounts are to reflect correct amounts for each accounting period.

E. in order to satisfy the Internal Revenue Service.

70. The recurring steps performed each reporting period, starting with analyzing and recording transactions in the journal and continuing through the post-closing trial balance, is referred to as the: 

A. Accounting period.

B. Operating cycle.

C. Accounting cycle.

D. Closing cycle.

E. Natural business year.