Question 1: The major purpose of a post-closing trial balance is to:

Select one:

a. determine if any adjusting entries have been missed.

b. determine if any closing entries have been missed.

c. confirm that the ledger is in balance at the start of the new accounting period.

d. prepare the accounting reports.

Question 2: What is the impact on the financial statements if an adjusting entry for accrual income is not made?

Select one:

a. Income understated and profit understated

b. Income overstated

c. Expenses understated and profit understated

d. Expenses understated and profit overstated

Question 3: The statement of changes in equity:

Select one:

a. indicates the ability of the entity to generate cash flow.

b. shows how profit was determined.

c. shows the selling price of the entitys assets.

d. shows the changes that took place in owners funds during the period.

Question 4: The main purpose of the bank reconciliation is:

Select one:

a. to prove the accuracy of the trial balance.

b. to prove the accuracy of the ledger bank account.

c. to prove the accuracy of the financial statements

d. to prove the accuracy of the general ledger.

Question 5: The closing entry process consists of closing

Select one:

a. all permanent accounts.

b. all asset and liability accounts.

c. out the owner's capital account.

d. all income and expenses accounts.

Question 6: In which order do these steps in the accounting cycle occur?

I Prepare closing entries

II Prepare adjusted trial balance

III Enter business transactions in the journal and post to the ledger

IV Prepare adjusting entries

V Prepare financial statements

Select one:

a. III, IV, II, I, V

b. IV, II, I, III, V

c. I, II, III, IV, V

d. III, I, IV, V, II

Question 7: Which of the following statement about control accounts is not correct?

Select one:

a. they follow the normal rules of debit and credit.

b. they provide summarised data.

c. they appear in the trial balance.

d. they appear in the subsidiary ledger.

Question 8: Posting is the process of transferring information from the

Select one:

a. journal to the ledger

b. ledger to the Financial Statements

c. journal to the trial balance

d. ledger to the trial balance

Question 9: Assets, liability and equity accounts are considered to be

Select one:

a. equity accounts

b. permanent accounts.

c. capital accounts.

d. temporary accounts.

Question 10: The debit balance of the trial balance is $256,000 and the credit balance of the trial balance is $265,000. This indicates which of the following?

Select one:

a. An account was posted for an incorrect amount

b. An account was posted twice

c. An account was not posted

d. Any of the above might have occurred