1. The best example of an adjusting journal entry is:
   1. record an increase in accounts receivable and an increase to sales revenue
   2. record an increase to cash and an increase in notes payable
   3. record a decrease to cash and a decrease to accounts payable
   4. record an increase to depreciation expense and a decrease to accumulated depreciation

2. One reason for a closing journal entry is:
   1. to add up the columns on a trial balance
   2. to record a routine, everyday transaction
   3. to make the balances in asset and liability accounts, $0
   4. to start out the next year with a new income statement for that year

3. One result of a closing journal entry would not be to:
   1. to put the amount of net income or net loss into retained earnings
   2. to debit revenues and credit expenses
   3. to credit revenues and debit expenses
   4. to get ready to prepare the income statement and balance sheet

4. Assume total revenues were $2,500,000 and total expenses were $2,230,000. The entry to Retained Earnings would include a:
   1. credit of $270,000
   2. debit of $230,000
   3. credit of $4,730,000
   4. debit of $270,000