1. How do temporary accounts differ from permanent accounts?

a. Only temporary accounts are closed at the end of the accounting period.

b. Only permanent accounts are transferred to Retained Earnings during the closing

c. Only temporary accounts are used in the adjustments at the end of the accounting period.

d. Only permanent accounts are found on the financial statements.

2. If adjustments to the financial statements were not made, what would be the effect on the financial results?

a. No effect would result because adjustments do not reflect cash paid or received.

b. There would be little effect because any items not recognized in the reporting period would be recognized the next reporting period.

c. The financial statements would present an incomplete and misleading picture of company financial performance.

d. There would be no effect because some adjustments increase net income and others decrease it, canceling each other out.

3. Which of these accounts would normally not be affected by an adjustment?

a. The Supplies account.

b. The Cash Account.

c. Expense accounts.

d. Revenue accounts.

4. Accumulated Depreciation appears on the:

a. balance sheet as a liability account.

b. income statement as an expense.

c. balance sheet as a contra- asset account.

d. balance sheet in the stockholders' equity section.

5. In the closing process, ______ are zeroed out by crediting each account and ______ are zeroed out by debiting each account.

a. revenues expenses and dividends

b. dividends revenues and expenses

c. expenses and dividends revenues

d. assets liabilities