Multiple choice questions:

1) At the end of the accounting period:

a) temporary accounts are closed; permanent accounts are not.

b) only accounts with a credit balance are closed.

c) all accounts are closed.

d) permanent accounts are closed; temporary accounts are not.

2) On the statement of retained earnings:

a) dividends declared are not used to calculate the end-of-year balance of retained earnings.

b) dividends declared increase net income and are added to calculate the end-of-year balance of retained earnings.

c) dividends declared are subtracted to calculate the end-of-year balance of retained earnings.

d) dividends declared are never reported.

3) At the end of the month, the adjusting journal entry relating to the use of supplies would include a:

a) credit to Supplies and a debit to Cash.

b) debit to Supplies and a credit to Supplies Expense.

c) credit to Supplies and a debit to Supplies Expense.

d) debit to Supplies and a credit to a revenue account.

4) The company uses up $5,000 of the book value of an existing asset. The company adjusts its accounts accordingly. Which of the following is a true statement?

a) The adjustment should not have been made.

b) This is a deferral adjustment.

c) This is an accrual adjustment.

d) This is a closing adjustment.

5) If certain assets are partially used up during the accounting period, then:

a) a liability account is decreased or eliminated and an expense is recorded.

b) an asset account is decreased or eliminated and an expense is recorded.

c) nothing is recorded on the financial statements until they are completely used up.

d) nothing is recorded on the financial statements until they are replaced or replenished.