ACCOUNTING QUESTIONS: quiz?

Question

1. The owner’s equity is ________.

A. added to assets and the two are equal to liabilities

B. added to liabilities and the two are equal to assets

C.subtract from liabilities and the net amount is equal to assets

D. subtract from owner’s equity and the net amount is equal to net income

2. On which financial statement will Income Summary be shown?

A. Statement of Owner's Equity

B. Balance Sheet

C. Income Statement

D. No financial statement

3. There are four closing entries. The first one is to close ____, the second one is to close ____, the third one is to close ____, and the last one is to close ____.

A. Revenues, expenses, income summary, drawing account

B. Expenses, assets, income summary, capital account

C. Capital account, drawing account, income summary, assets

D. Drawing account, income summary, expenses, revenues

Answer 1

1. b, asset= liabilities + owners equity or simply capital.

2. d, because income summary account is a temporary account use to close the net income to the equity or capital account.

3. a, those accounts are nominal account and must be closed at the end of accounting period.