1. 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. 2. Revenues, expenses, and withdrawals accounts, which are closed at the end of each accounting period are: A. Real accounts. B. Closing accounts. C. Temporary accounts. D. Permanent accounts. E. Balance sheet accounts. 3. Reversing entries: A. Are mandatory. B. Correct errors in journal entries. C. Are optional D. Are required by GAAP. E. prepared on the worksheet 4. A classified balance sheet: A. Measures a company's ability to pay its bills on time. B. Organizes assets and liabilities into important subgroups. C. Presents revenues, expenses, and net income. D. Reports operating, investing, and financing activities. E. Reports the effect of profit and withdrawals on owner's capital. 5. The current ratio: A. Is used to help evaluate a company's ability to pay its debts in the near future. B. Is used to measure a company's profitability. C. Is used to measure the relation between assets and long-term debt. D. Measures the effect of operating income on profit. E. Is calculated by dividing current assets by equity. 6. Beginning inventory plus net purchases is: A. Cost of goods sold. B. Merchandise available for sale. C. Ending inventory. D. Sales. E. Shown on the balance sheet