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1.Once the adjusted trial balance is complete, the income statement can be prepared.

True/ false

2.The components of retained earnings include assets, expenses, and dividends.

True

False

3.After closing entries are posted to the accounts in the general ledger, all asset and liability accounts have a balance of zero.

True

False

4.Long-term productive assets used in the normal course of business are typically classified as:

a). Investments.

b).Property, plant, and equipment.

c).Intangible assets.

d).Current assets.

5.Patents, copyrights, franchises, and trademarks are examples of:

a).Property, plant, and equipment.

b).Current assets.

c).Intangible assets.

d).Investments.

6.A current liability is defined as:

a).An amount borrowed less than one year ago.

b).A small amount due.

c).An amount due within one year.

d).An amount due to an employee.

7.The Deferred Revenue account is shown in which statement?

a).Statement of stockholders' equity.

b).Statement of cash flows.

c).Income statement.

d).Balance sheet.

8.Which of the following describes the purpose(s) of closing entries?

a). Reduce the balances of the temporary accounts to zero to prepare them for measuring activity in the next period.

b). Adjust the balances of asset and liability accounts for unrecorded activity during the period.

c). Transfer the balances of temporary accounts to common stock; reduce the balances of the temporary accounts to zero to prepare them for measuring activity in the next period.

d). Transfer the balances of temporary accounts to common stock.

9.The closing process includes which of the following?

a). Closing the balance of only the dividends account to zero.

b).Closing the balances of only revenue and expense accounts to zero.

c).Closing the balance of the retained earnings account to zero.

d). Closing the balances of revenue, expense and dividend accounts to zero.

10.The purpose of closing entries is to transfer:

a). Accounts Receivable to Retained Earnings when an account is fully paid.

b). Balances in temporary accounts to a permanent account.

c).Inventory to Cost of Goods Sold when merchandise is sold.

d).Assets and liabilities when operations are discontinued.

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