Quiz  /  Retained Earnings Gate & PSU MCQ Questions With Answers

  • 1. 
    Into which account is the amount of net income or net loss closed?

  • Share capital
  • Retained Earnings
  • Cash
  • Dividends

  • 2. 
    After closing entries are posted, Retained earnings' balance should be the same as shown

  • on the balance sheet at the end of the fiscal period
  • on the income statement for the fiscal period
  • on the adjusted trial balance
  • on the trial balance

  • 3. 
    The fourth step is to close which of the following accounts?

  • share capital
  • dividend
  • revenue
  • expense

  • 4. 
    The journal entry to close Income Summary when there is a net loss is

  • debit Revenues, credit Income Summary
  • debit Retained earnings; credit Income Summary
  • debit Retained earnings; credit Revenues
  • debit Income Summary; credit Retained earnings

  • 5. 
    When the total revenues are greater than the total expenses,

  • the Income Summary account has a credit balance
  • The Income Summary account has a debit balance
  • debits equal credits
  • none of these

  • 6. 
    Temporary accounts include assets, expenses, and dividends.

  • True
  • False

  • 7. 
    Income Summary is a(n)

  • asset account
  • liability account
  • temporary account
  • permanent account

  • 8. 
    Which account should be closed first?

  • Revenue
  • Expense
  • Income Summary
  • Dividends

  • 9. 
    Which of the following is a "real" account?

  • cash
  • expenses
  • revenue
  • income summary

  • 10. 
    After the first two closing entries are posted, the balance of the Income Summary account should equal the net income/loss on the

  • balance sheet
  • statement of owner's equity
  • work sheet
  • income statement

  • 11. 
    What is the source of information for completing the closing entries?

  • Unadjusted trial balance
  • Income Statement
  • Adjusted trial balance
  • Work sheet

  • 12. 
    The last step in the accounting cycle is to

  • record transactions in a journal
  • prepare a work sheet
  • journalize and post closing entries
  • prepare a post-closing trial balance

  • 13. 
    Temporary accounts begin each new fiscal period with a

  • debit balance
  • credit balance
  • zero balance
  • balance equal to the net income

  • 14. 
    Which of the following accounts is a temporary account?

  • cash
  • accounts payable
  • revenue
  • capital

  • 15. 
    If a corporation does not pay out dividends, it would only prepare three closing entries.

  • True
  • False

  • 16. 
    Which account would not be contained on a post-closing trial balance?

  • Unearned Revenue
  • Accumulated Depreciation - Office Equipment
  • Share capital
  • Dividends
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