Closing entries:

Select one:

a. reduce the number of permanent accounts.

b. are prepared before the unadjusted trial balance.

c. cause the revenue and expense accounts to have zero balances.

d. summarise the activity in every account.

An accumulated depreciation account:

Select one:

a. has a normal credit balance.

b. increases on the debit side.

c. is offset against total revenue on the income statement.

d. is a contra liability account.

In a service business, revenue is considered earned:

Select one:

a. when the service is performed.

b. at the end of the month.

c. when cash is received.

d. at the end of the year.

Indicate how a payment of cash for cleaning services affects the basic accounting equation.

Select one:

a. Increase assets, cash and decrease in equity, cleaning expenses.

b. Decrease assets, cash and increase in equity, cleaning expenses.

c. Increase assets, cash and increase in equity, cleaning expenses.

d. Decrease assets, cash and decrease in equity, cleaning expenses.

When preparing closing journal entries, the interest income account is closed:

Select one:

a. to the Profit and loss summary account.

b. to the interest income account.

c. directly to the Capital account.

d. directly to an accounts receivable account.

If services are provided for credit, then:

Select one:

a. liabilities will increase.

b. Equity will increase.

c. liabilities will decrease.

d. assets will decrease.

A T account is:

Select one:

a. a special account used instead of a journal.

b. used for accounts that have only a debit balance.

c. a way of depicting the basic form of an account.

d. a special account used instead of a trial balance.

f the totals of a trial balance are not equal, it could be due to:

Select one:

a. recording the transaction more than once.

b. a failure to record or to post a transaction.

c. recording the same erroneous amount for both the debit and credit parts of a transaction.

d. an error in calculating the account balances