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58. Closing entries are journalized and posted a. before the financial statements are prepared. b. after the financial statements are prepared. c. at management's discretion. d. at the end of each interim accounting period.

59. Closing entries a. are prepared before the financial statements. b. reduce the number of permanent accounts. c. cause the revenue and expense accounts to have zero balances. d. summarize the activity in every account.

60. Which of the following is a true statement about closing the books of a proprietorship? a. Expenses are closed to the Expense Summary account. b. Only revenues are closed to the Income Summary account. c. Revenues and expenses are closed to the Income Summary account. d. Revenues, expenses, and the owner's drawing account are closed to the Income Summary account.

61. Closing entries may be prepared from all but which one of the following sources? a. Adjusted balances in the ledger b. Income statement and balance sheet columns of the work sheet c. Balance sheet d. Income and owner's equity statements

62. In order to close the owner's drawing account, the a. income summary account should be debited. b. income summary account should be credited. c. owner's capital account should be credited. d. owner's capital account should be debited.

63. In preparing closing entries a. each revenue account will be credited. b. each expense account will be credited. c. the owner's capital account will be debited if there is net income for the period. d. the owner's drawing account will be debited.

64. The most efficient way to accomplish closing entries is to a. credit the income summary account for each revenue account balance. b. debit the income summary account for each expense account balance. c. credit the owner's drawing balance directly to the income summary account. d. credit the income summary account for total revenues and debit the income summary account for total expenses.

65. The closing entry process consists of closing a. all asset and liability accounts. b. out the owner's capital account. c. all permanent accounts. d. all temporary accounts.

66. The final closing entry to be journalized is typically the entry that closes the a. revenue accounts. b. owner's drawing account. c. owner's capital account. d. expense accounts.

67. An error has occurred in the closing entry process if a. revenue and expense accounts have zero balances. b. the owner's capital account is credited for the amount of net income. c. the owner's drawing account is closed to the owner's capital account. d. the balance sheet accounts have zero balances.

68. The Income Summary account is an important account that is used a. during interim periods. b. in preparing adjusting entries. c. annually in preparing closing entries. d. annually in preparing correcting entries.

69. The balance in the income summary account before it is closed will be equal to a. the net income or loss on the income statement. b. the beginning balance in the owner's capital account. c. the ending balance in the owner's capital account. d. zero.

70. After closing entries are posted, the balance in the owner's capital account in the ledger will be equal to a. the beginning owner's capital reported on the owner's equity statement. b. the amount of the owner's capital reported on the balance sheet. c. zero. d. the net income for the period.

71. A post-closing trial balance will show a. only permanent account balances. b. only temporary account balances. c. zero balances for all accounts. d. the amount of net income (or loss) for the period.

72. A post-closing trial balance should be prepared a. before closing entries are posted to the ledger accounts. b. after closing entries are posted to the ledger accounts. c. before adjusting entries are posted to the ledger accounts. d. only if an error in the accounts is detected.

73. A post-closing trial balance will show a. zero balances for all accounts. b. zero balances for balance sheet accounts. c. only balance sheet accounts. d. only income statement accounts. 74. The purpose of the post-closing trial balance is to a. prove that no mistakes were made. b. prove the equality of the balance sheet account balances that are carried forward into the next accounting period. c. prove the equality of the income statement account balances that are carried forward into the next accounting period. d. list all the balance sheet accounts in alphabetical order for easy reference.

75. The balances that appear on the post-closing trial balance will match the a. income statement account balances after adjustments. b. balance sheet account balances after closing entries. c. income statement account balances after closing entries. d. balance sheet account balances after adjustments.

76. Which account listed below would be double ruled in the ledger as part of the closing process? a. Cash b. Owner's Capital c. Owner's Drawing d. Accumulated Depreciation

77. A double rule applied to accounts in the ledger during the closing process implies that a. the account is an income statement account. b. the account is a balance sheet account. c. the account balance is not zero. d. a mistake has been made, since double ruling is prescribed.

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