Multiple choice

1. Closing entries are necessary for 

a. permanent accounts only.

 b. temporary accounts only.

c. both permanent and temporary accounts. 

d. permanent or real accounts only. 

2. A post-closing trial balance will show 

a. only permanent account balances. 

b. only temporary account balances. 

c. zero balances for all accounts. 

d. the amount of net income (or loss) for the period. 

3. The step in the accounting cycle that is performed on a periodic basis (i.e., monthly, quarterly) is 

a. analyzing transactions. 

b. journalizing and posting adjusting entries. 

c. preparing a post-closing trial balance. 

d. posting to ledger accounts. 

4. A current asset is 

a. the last asset purchased by a business. 

b. an asset which is currently being used to produce a product or service. 

c. usually found as a separate classification in the income statement. 

d. an asset that a company expects to convert to cash or use up within one year.