Quiz 5: Adjusting Entries & Closing
1. What does the word accrual mean?
A) Revenue or expenses stated for a payment before the move of cash takes place
C) Money received or spent after actual payment
C) A guess at what expenses will be in the future
D) A mistake in entering data during transactions
2. Which entry accounts for revenue earned before it is received?
A) First issue a cash debit, then give the revenue its credit.
B) Increase debit accounts receivable, increase credit revenue
D) Your account credited is debit revenue; your debited account is accounts payable
D) Expenses that go out of your business are Debit and when cash comes in, that’s credit.
3. Which account do closing entries send balances to?
A) Revenue
B) Expenses
C) Owner’s Equity
D) Assets
4. What is an example of a deferral?
A) You can pay for your insurance upfront with prepaid insurance.
B) Compensation earned but not yet paid
C) Receivable accounts
D) This next section is called accounts payable.
5. Is there anything that happens with expense accounts as you get ready to close the
business?
A) Nobody receives credit for them
B) They are accounted for as zero value
C) Results are entered into the income summary account.
D) They will continue to be open during the following period.
6. What category does “accumulated depreciation” fall into?
A) Asset
B) Liability
C) Contra-asset
D) Expense
1. What does the word accrual mean?
A) Revenue or expenses stated for a payment before the move of cash takes place
C) Money received or spent after actual payment
C) A guess at what expenses will be in the future
D) A mistake in entering data during transactions
2. Which entry accounts for revenue earned before it is received?
A) First issue a cash debit, then give the revenue its credit.
B) Increase debit accounts receivable, increase credit revenue
D) Your account credited is debit revenue; your debited account is accounts payable
D) Expenses that go out of your business are Debit and when cash comes in, that’s credit.
3. Which account do closing entries send balances to?
A) Revenue
B) Expenses
C) Owner’s Equity
D) Assets
4. What is an example of a deferral?
A) You can pay for your insurance upfront with prepaid insurance.
B) Compensation earned but not yet paid
C) Receivable accounts
D) This next section is called accounts payable.
5. Is there anything that happens with expense accounts as you get ready to close the
business?
A) Nobody receives credit for them
B) They are accounted for as zero value
C) Results are entered into the income summary account.
D) They will continue to be open during the following period.
6. What category does “accumulated depreciation” fall into?
A) Asset
B) Liability
C) Contra-asset
D) Expense
