ACCT 321 – Intermediate Accounting I Chapter 2 Practice Exam Questions / Problems (with Solutions) Page 1 of 17 Section 1: Short Answer Questions For each question, please circle the best answer choice or fill in the blank with the most appropriate term(s). 1. Which of the following accounts does NOTget closed at the end of each accounting period? a. Cost of Goods Sold b. Sales Discounts c. Purchase Returns and Allowances d. Accumulated Depreciation Accumulated Depreciation is a contra-asset account, so it does not get closed. Cost of Goods Sold is a special type of expense, which gets closed. Purchase Returns and Allowances is a contra-expense, which only applies to a periodic inventory system and gets closed to Cost of Goods Sold at the end of the period. Sales Discounts is a contra-revenue that also gets closed.
2. If total revenues for the period are $12,000, total expenses are $8,000, and dividends are $2,000, what will be the balance of Income Summary after all closing entries?
3. Postings to the Wages Payable subsidiary ledger, which segregates the employees owed, occur when wages are accrued and also when accrued wages are paid.