1. Which of the following accounts would be closed at the end of the financial statement cycle?
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a. Accounts receivable
b. Accounts payable
c. Cost of goods sold
d. Unearned revenue
2. Jenkins Company received $600 from a client in May for work Jenkins would perform during May and June. What entry should Jenkins make on May 31 if one-third of the work is complete on that date?
3. Which of the following accounts would increase retained earnings when closed into it?
b. Sales revenue
c. Loss of sale of land
d. Rent expense
4. Which of the following is not one of the four types of adjustments?
a. Prepaid revenue
b. Accrued expenses
c. Unearned revenue
d. Prepaid expenses
5. In September 20X3, LaToya Corporation paid for insurance for the next six months in the amount of $42,000. On December 31, LaToya’s accountant forgot to make the adjusting entry that was needed. Which of the following is true?
a. Assets are understated by $42,000.
b. Net income is understated by $14,000.
c. Expenses are overstated by $42,000.
d. Net income is overstated by $28,000.