Principles of Accounting I Module Exam II.docx - Principles...

Principles of Accounting I
Module Exam II, Chapters 4 and 5
True / False Questions
1. Accounts that appear in the balance sheet are often called temporary (nominal)
accounts.
True False
2. Income Summary is a temporary account only used for the closing process.
3. Revenue accounts are temporary accounts that should begin each accounting period
with zero balances.
4. Closing revenue and expense accounts at the end of the accounting period serves to
make the revenue and expense accounts ready for use in the next period.
5. The closing process takes place before financial statements have been prepared.
True False

6
.
Revenue and expense accounts are permanent (real) accounts and should not be closed at
the end of the accounting period.
Multiple Choice Questions
7. Another name for a temporary account is a(n):
8. Which of the following accounts are permanent (real) accounts?

payable.
E. Salaries
expense.
A. All ledger accounts are closed to start the new accounting
period.
B. All temporary accounts are closed but permanent accounts are not
closed.
C. All real accounts are closed but nominal accounts are not
closed.
D. All permanent accounts are closed but nominal accounts are not
closed.
E. All balance sheet accounts are
closed.
10. Revenues, expenses, and withdrawals accounts, which are closed at the end of each
accounting period are:
A. Real
accounts.
B. Temporary
accounts.
C. Closing
accounts.
D. Permanent
accounts.
E. Balance sheet

accounts.
11. Which of the following statements is incorrect?
12. Assets, liabilities, and equity accounts are not closed; these accounts are called:
13. Closing the temporary accounts at the end of each accounting period does all of the

following except :