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The Special Account




1. The special account used only in the closing process to temporarily hold the amounts of revenues and expenses before the net difference is added to (or subtracted from) the retained earnings account is the: (Points: 2);Income Summary account;Closing account;Balance column account;Contra account;2. The Income Summary account is used: (Points: 2);To adjust and update asset and liability accounts;To close the revenue and expense accounts;To determine the appropriate dividend amount;In some situations to replace the income statement;To replace the retained earnings account in some businesses;3. The main purpose of adjusting entries is to: (Points: 2);Record external transactions and events;Record internal transactions and events;Recognize assets purchased during the period;Recognize debts paid during the period;Correct errors;4. If accrued salaries were recorded on December 31 with a credit to Salaries Payable, the entry to record payment of these wages on the following January 5 would include: (Points: 2);A debit to Cash and a credit to Salaries Payable;A debit to Cash and a credit to Prepaid Salaries;A debit to Salaries Payable and a credit to Cash;A debit to Salaries Payable and a credit to Salaries Expense;No entry would be necessary on January 5;5. The accrual basis of accounting: (Points: 2);Is generally accepted for external reporting since it is more useful for most business decisions;Is flawed because it gives complete information about cash flows;Recognizes revenues when received in cash;Recognizes expenses when paid in cash;Eliminates the need for adjusting entries at the end of each period;6. Which of the following accounts would not be on the post closing trial balance? (Points: 2);Accounts Payable;Accounts Receivable;Common Stock;Dividends;Retained Earnings;7. The primary objective of financial accounting is: (Points: 2);To serve the decision-making needs of internal users;To provide financial statements to help external users analyze and interpret an organization's activities;To monitor and control company activities;To provide information on both the costs and benefits of managing products and services;To know what, when and how much to produce;8. Which of the following elements are found on the income statement? (Points: 2);Cash;Accounts Receivable;Common Stock;Retained Earnings;Salaries Expense;9. Distributions of assets by a business to its stockholders are called: (Points: 2);Dividends;Expenses;Assets;Retained earnings;Net Income;10. Net Income: (Points: 2);Decreases equity;Represents the amount of assets owners put into a business;Equals assets minus liabilities;Is the excess of revenues over expenses;Represents the owners' claims against assets;11. If equity is $300,000 and liabilities are $192,000, then assets equal: (Points: 2);$108,000;$192,000;$300,000;$492,000;$792,000;Calculation: xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx;12. Risk is: (Points: 2);Net income divided by average total assets;The reward for investment;The uncertainty about the expected return that will be earned from an investment;Unrelated to expected return


Paper#79715 | Written in 18-Jul-2015

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