Chapter 10 Closing the General Ledger – Test
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This document contains a 25 question multiple choice test on closing the general ledger. It covers topics like which accounts are closed at the end of the reporting period, how the profit and loss summary account works, and what closing entries are needed. It also includes sample trial balances and questions about calculating net profit and preparing closing journal entries.
Chapter 10 Closing the General Ledger – Test
- 1. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 10 – CLOSING THE GENERAL LEDGER © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 1 Chapter 10 Test – Closing the General Ledger Name ___________________________________________ Circle the correct response for each question: 1. (a) (b) (c) (d) 2. (a) (b) (c) (d) 3. (a) (b) (c) (d) 4. (a) (b) (c) (d) 5. (a) (b) (c) (d) 6. (a) (b) (c) (d) 7. (a) (b) (c) (d) 8. (a) (b) (c) (d) 9. (a) (b) (c) (d) 10. (a) (b) (c) (d) 11. (a) (b) (c) (d) 12. (a) (b) (c) (d) 13. (a) (b) (c) (d) 14. (a) (b) (c) (d) 15. (a) (b) (c) (d) 16. (a) (b) (c) (d) 17. (a) (b) (c) (d) 18. (a) (b) (c) (d) 19. (a) (b) (c) (d) 20. (a) (b) (c) (d) 21. (a) (b) (c) (d) 22. (a) (b) (c) (d) 23. (a) (b) (c) (d) 24. (a) (b) (c) (d) 25. (a) (b) (c) (d) Total /25 marks
- 2. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 10 – CLOSING THE GENERAL LEDGER © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 2 Chapter 10 Test – Closing the General Ledger 1. Which of the following types of accounts is closed at the end of the reporting period? a) Assets b) Revenues c) Liabilities d) Owner’s Equity 2. Which of the following accounts would be balanced into the next reporting period? a) Cash sales b) Wages c) Debtors control d) Insurance expense 3. The Profit and Loss Summary account is what sort of account? a) Owner’s Equity b) Asset c) Expense d) Revenue 4. On which side of the Profit and Loss Summary ledger would you find Revenue accounts? a) Credit side b) Debit side c) Neither side d) Either the debit or credit side 5. On which side of the Profit and Loss Summary ledger would you find Expense accounts? a) Credit side b) Neither side c) Either the debit or credit side d) Debit side 6. On which side of the Profit and Loss Summary ledger would you find a Net Profit? a) Either the debit or credit side b) Neither side c) Credit side d) Debit side
- 3. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 10 – CLOSING THE GENERAL LEDGER © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 3 7. At the end of the reporting period, the Drawings account is closed off to: a) Capital b) Cash at bank c) Profit and loss summary d) Expenses 8. Closing entries are prepared in the: a) Cash Receipts Journal b) Income Statement c) General Journal d) Cash Payments Journal 9. During March 2015 a business recorded a Net Profit of $3,000. The entry required in the General Journal to record this would be: a) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 31 Mar Capital 3000 Profit and loss summary 3000 b) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 31 Mar Cash at bank 3000 Profit and loss summary 3000 c) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 31 Mar Profit and loss summary 3000 Capital 3000 d) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 31 Mar Profit and loss summary 3000 Revenue accounts 3000
- 4. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 10 – CLOSING THE GENERAL LEDGER © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 4 10. A small business owner made drawings during June 2015 of $1,500. The entry required in the General Journal to record this would be: a) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 30 Jun Capital 1500 Drawings 1500 b) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 30 Jun Drawings 1500 Capital 1500 c) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 30 Jun Cash at bank 1500 Drawings 1500 d) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 30 Jun Drawings 1500 Cash at bank 1500
- 5. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 10 – CLOSING THE GENERAL LEDGER © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 5 The following information relates to a small trading business: Cash Sales 28 Feb Cash at bank 35900 Cost of Sales 28 Feb Stock control 22700 Vehicle Expenses 28 Feb Cash at bank 2400 Drawings 28 Feb Cash at bank 700 Wages 28 Feb Cash at bank 9300 Credit Sales 28 Feb Debtors control 7900 Rent 28 Feb Cash at bank 4200 Capital 1 Feb Balance 68000 11. Based on the ledgers provided, the firm’s financial performance for the period was a: a) Net Profit of $4,500 b) Net Loss of $5,200 c) Net Loss of $4,500 d) Net Profit of $5,200 12. At the end of February, the balance in the firm’s Capital account will be: a) $68,000 b) $73,200 c) $63,500 d) $72,500
- 6. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 10 – CLOSING THE GENERAL LEDGER © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 6 13. Once all closing entries have been made, the Profit and Loss Summary ledger will look like: a) Profit and Loss Summary 28 Feb Revenue accounts 43800 28 Feb Expense accounts 38600 28 Feb Capital 5200 43800 43800 b) Profit and Loss Summary 28 Feb Expense accounts 38600 28 Feb Revenue accounts 43800 28 Feb Capital 5200 43800 43800 c) Profit and Loss Summary 28 Feb Expense accounts 38600 28 Feb Revenue accounts 43800 d) Profit and Loss Summary 28 Feb Expense accounts 39300 28 Feb Revenue accounts 43800 28 Feb Capital 4500 43800 43800
- 7. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 10 – CLOSING THE GENERAL LEDGER © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 7 The owner of a small business has provided the following Trial Balance at the end of a o-month reporting period. Trial Balance as at 31 March 2015 $ $ Advertising 1300 Capital 67700 Assistant’s wages 12200 Cash at bank 2300 Cost of sales 18100 Commission revenue 1700 Debtors control 3900 Creditors control 4900 Drawings 13400 GST clearing 2800 Interest expense 1400 Loan – M.L. Finance 30000 Office equipment 3700 Sales 40300 Petrol 1900 Postage 200 Rent 11600 Stock control 48100 Telephone expense 700 Vehicle 32000 Vehicle insurance 500 Vehicle registration 700 149700 149700 14. The entry required in the General Journal to close the firm’s expense accounts will be: a) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 31 Mar Profit and loss summary 48600 Advertising 1300 Assistant’s wages 12200 Cost of sales 18100 Interest expense 1400 Petrol 1900 Postage 200 Rent 11600 Telephone expense 700 Vehicle insurance 500 Vehicle registration 700
- 8. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 10 – CLOSING THE GENERAL LEDGER © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 8 b) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 31 Mar Advertising 1300 Assistant’s wages 12200 Cost of sales 18100 Interest expense 1400 Petrol 1900 Postage 200 Rent 11600 Telephone expense 700 Vehicle insurance 500 Vehicle registration 700 Profit and loss summary 48600 c) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 31 Mar Profit and loss summary 62000 Advertising 1300 Assistant’s wages 12200 Cost of sales 18100 Drawings 13400 Interest expense 1400 Petrol 1900 Postage 200 Rent 11600 Telephone expense 700 Vehicle insurance 500 Vehicle registration 700 d) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 31 Mar Profit and loss summary 48600 Expense accounts 1300
- 9. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 10 – CLOSING THE GENERAL LEDGER © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 9 15. The entry required in the General Journal to transfer the Net Profit or Net Loss for the period is: a) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 31 Mar Profit and loss summary 6600 Capital 6600 b) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 31 Mar Expense accounts 48600 Revenue accounts 42000 Profit and loss summary 6600 c) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 31 Mar Capital 6600 Profit and loss summary 6600 d) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 31 Mar Capital 8300 Profit and loss summary 8300
- 10. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 10 – CLOSING THE GENERAL LEDGER © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 10 16. At the end of the period once all closing and balancing entries have been performed, the firm’s Capital ledger will look like: a) Capital 31 Mar Profit and loss summary 6600 1 Mar Balance 67700 31 Mar Drawings 13400 31 Mar Balance 47700 67700 67700 1 Apr Balance 47700 b) Capital 1 Mar Balance 67700 31 Mar Profit and loss summary 6600 31 Mar Drawings 13400 31 Mar Balance 47700 67700 67700 1 Apr Balance 47700 c) Capital 31 Mar Drawings 13400 1 Mar Balance 67700 31 Mar Profit and loss summary 6600 31 Mar Balance 60900 74300 74300 1 Apr Balance 60900 d) Capital 31 Mar Profit and loss summary 6600 1 Mar Balance 67700 31 Mar Drawings 13400 31 Mar Balance 74500 81100 81100 1 Apr Balance 74500
- 11. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 10 – CLOSING THE GENERAL LEDGER © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 11 The owner of a trading firm has supplied the following Trial Balance at the end of the yearly reporting period. Trial Balance as at 30 April 2015 $ $ Advertising 2900 Capital 122800 Cash at bank 4000 Cash sales 97000 Cost of sales 43000 Credit sales 12900 Debtors control 3400 Creditors control 6900 Drawings 15000 Discount revenue 1000 Electricity 800 GST clearing 800 Insurance 1200 Loan – G.M. Cash 39000 Interest on loan 5100 Mortgage loan 410000 Office furniture 1200 Postage 300 Premises 520000 Rates 800 Shop fittings 11000 Stationary expense 200 Stock control 45600 Stock loss 700 Telephone expense 700 Vehicle 14000 Vehicle expenses 1500 Wages 19000 690400 690400 17. The entry required in the firm’s General Journal to close all revenues accounts will be: a) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 30 Apr Profit and loss summary 110900 Cash sales 97000 Credit sales 12900 Discount revenue 1000 b) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 30 Apr Cash sales 97000 Credit sales 12900 Discount revenue 1000 Profit and loss summary 110900
- 12. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 10 – CLOSING THE GENERAL LEDGER © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 12 c) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 30 Apr Cash sales 97000 Credit sales 12900 Profit and loss summary 109900 d) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 30 Apr Profit and loss summary 109900 Cash sales 97000 Credit sales 12900 18. Based on the data in the Trial Balance, the firm’s financial performance for the period is a: a) Net Profit of $33,700 b) Net Profit of $34,500 c) Net Profit of $35,500 d) Net Profit of $34,700 19. At the end of the reporting period, the Owner’s Equity section of the firm’s Balance Sheet will look like: a) Balance Sheet (Extract) as at April 30th 2015 $ $ Owner’s Equity Capital 142500 b) Balance Sheet (Extract) as at April 30th 2015 $ $ Owner’s Equity Capital 122800 plus Net Profit (Loss) 34700 157500 less Drawings 15000 142500
- 13. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 10 – CLOSING THE GENERAL LEDGER © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 13 c) Balance Sheet (Extract) as at April 30th 2015 $ $ Owner’s Equity Capital 122800 plus Net Profit (Loss) 33700 156500 less Drawings 15000 141500 d) Balance Sheet (Extract) as at April 30th 2015 $ $ Owner’s Equity Capital 122800 plus Net Profit (Loss) 34700 157500 plus Drawings 15000 172500
- 14. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 10 – CLOSING THE GENERAL LEDGER © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 14 The following information relates to a small trading firm. Trial Balance as at 31 May 2015 Debit Credit $ $ Cash at bank 3400 GST clearing 4100 Telephone expense 700 Electricity 500 Stock control 57000 Discount revenue 800 Investment account 9000 Advertising 1500 Loan 141000 Debtors control 3100 Repairs to premises 900 Capital 293100 Wages 24200 Sales – cash 75200 Sales – credit 39600 Interest expense 1600 Drawings 9400 Stationary 300 Creditors control 7100 Cost of sales 56300 Commission 2100 Accountant’s fees 900 Premises 390000 Stock gain 600 Discount expense 500 Cleaning of premises 4300 563600 563600 20. At the end of the reporting period, the firm’s Sales - Cash ledger will look like: a) Sales – Cash 31 May Cash at bank 75200 31 May Profit and loss summary 75200 75200 75200 b) Sales – Cash 31 May Profit and loss summary 75200 31 May Debtors control 75200 75200 75200
- 15. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 10 – CLOSING THE GENERAL LEDGER © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 15 c) Sales – Cash 31 May Profit and loss summary 75200 31 May Cash at bank 75200 75200 75200 d) Sales – Cash 31 May Capital 75200 31 May Cash at bank 75200 75200 75200 21. The entry required in the General Journal to transfer the Net Profit or Net Loss for the period is: a) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 31 May Profit and loss summary 24500 Capital 24500 b) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 31 May Profit and loss summary 27500 Capital 27500 c) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 31 May Profit and loss summary 26600 Capital 26600 d) General Journal Date Particulars General Ledger Subsidiary Ledger Debit $ Credit $ Debit $ Credit $ 31 May Profit and loss summary 23100 Capital 23100
- 16. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 10 – CLOSING THE GENERAL LEDGER © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 16 22. At the end of the reporting period, the firm’s Capital ledger will look like: a) Capital 31 May Profit and loss summary 26600 1 May Balance 293100 31 May Balance 275900 31 May Drawings 9400 302500 302500 1 Jun Balance 275900 b) Capital 31 May Drawings 9400 1 May Balance 293100 31 May Balance 310300 31 May Profit and loss summary 26600 319700 319700 1 Jun Balance 310300 c) Capital 31 May Drawings 9400 1 May Balance 293100 31 May Balance 310300 31 May Cash at bank 26600 319700 319700 1 Jun Balance 310300 d) Capital 1 May Balance 293100 31 May Balance 319700 31 May Profit and loss summary 26600 319700 319700 1 Jun Balance 319700
- 17. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 10 – CLOSING THE GENERAL LEDGER © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 17 The following information relates to a small business. Trial Balance as at 30 June 2015 Debit Credit $ $ Advertising 1300 Bank 2200 Capital 81300 Carry bags 1200 Cash sales 95000 Cleaning of shop 900 Computer equipment 8200 Cost of sales 48200 Credit sales 27800 Creditors control 4900 Debtors control 4100 Delivery van 28000 Discount expense 200 Drawings 17600 Electricity 600 General office expenses 2200 GST clearing 2900 Interest on loan 1300 Interest on term deposit 700 Legal expenses 400 Loan 26000 Maintenance – computers 1000 Office stationary expense 300 Rent of shop 33100 Stock control 36700 Stock loss 1900 Telephone expense 700 Term deposit 15900 Wages 37000 240800 240800 23. Based on the data in the Trial Balance, the firm’s financial performance for the period is a: a) Net Loss of $6,800 b) Net Loss of $7,500 c) Net Loss of $8,200 d) Net Loss of $6,600
- 18. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 10 – CLOSING THE GENERAL LEDGER © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 18 24. At the end of the period after all closing entries have been made, the firm’s Profit and Loss Summary account will look like: a) Profit and Loss Summary 30 Jun Revenue accounts 123500 30 Jun Expense accounts 130300 30 Jun Profit and loss summary 6800 130300 130300 b) Profit and Loss Summary 30 Jun Expense accounts 130300 30 Jun Revenue accounts 123500 30 Jun Drawings 17600 30 Jun Profit and loss summary 6800 30 Jun Balance 17600 147900 147900 1 Jul Balance 17600 c) Profit and Loss Summary 30 Jun Expense accounts 130300 30 Jun Revenue accounts 123500 30 Jun Profit and loss summary 6800 130300 130300 d) Profit and Loss Summary 30 Jun Expense accounts 130300 30 Jun Revenue accounts 123500 30 Jun Capital 6800 130300 130300 25. At the end of the reporting period, the Owner’s Equity section of the firm’s Balance Sheet will look like: a) Balance Sheet (Extract) as at June 30th 2015 $ $ Owner’s Equity Capital 81300 plus Net Profit (Loss) 6800 88100 less Drawings 17600 70500
- 19. VCE ACCOUNTING UNIT 3 – RECORDING AND REPORTING FOR A TRADING BUSINESS CHAPTER 10 – CLOSING THE GENERAL LEDGER © Michael Allison, Trinity Grammar School. Author’s permission required for external use Page | 19 b) Balance Sheet (Extract) as at June 30th 2015 $ $ Owner’s Equity Capital 81300 plus Net Profit (Loss) (6800) 74500 less Drawings 17600 56900 c) Balance Sheet (Extract) as at June 30th 2015 $ $ Owner’s Equity Capital 56900 d) Balance Sheet (Extract) as at June 30th 2015 $ $ Owner’s Equity Capital 81300 plus Net Profit (Loss) (6800) 74500 plus Drawings 17600 92100