Test Your Accounting Concepts Knowledge! Trivia Questions Quiz

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Hasan350058

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Quizzes Created: 1 | Total Attempts: 193

Questions: 10 | Attempts: 195 | Updated: Mar 22, 2023

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Test Your Accounting Concepts Knowledge! Trivia Questions Quiz - Quiz

Test Your Accounting Concepts Knowledge using this Trivia Questions Quiz. Accounting is a major department in any organization as it is tasked with collection, recording and use of funds as needed to meet the objectives of the organizations. Press the start button and get to see if you remember the concepts of a good accounting practice. All the best!

Questions and Answers

1.

Costs incurred to increase the operating efficiency, productive capacity, or useful life of a plant asset referred to as--------
- A.
  
  Revenue expenditures
- B.
  
  Capital expenditures
- C.
  
  Both
- D.
  
  None of the above
Correct Answer
B. Capital expenditures

Explanation
Capital expenditures refer to costs incurred to increase the operating efficiency, productive capacity, or useful life of a plant asset. These expenditures are typically long-term investments that provide future benefits to the company. Revenue expenditures, on the other hand, are costs that are incurred for the day-to-day operations of the business and are expensed immediately. Therefore, the correct answer is capital expenditures.

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2.

Give the owner the exclusive right to reproduce and sell an artistic or published work.
- A.
  
  Patents
- B.
  
  Copyrights
- C.
  
  Franchises or licenses
- D.
  
  Trademarks or trade names
Correct Answer
B. Copyrights

Explanation
Copyrights give the owner the exclusive right to reproduce and sell an artistic or published work. Patents are exclusive rights granted for inventions, franchises or licenses are rights granted to operate a business using a certain brand or system, and trademarks or trade names are rights granted to protect brands or business names. Therefore, the correct answer is copyrights.

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3.

All of the following are characteristics of partnerships except
- A.
  
  Co-ownership of property
- B.
  
  Mutual agency
- C.
  
  Limited life
- D.
  
  Limited liability.
Correct Answer
D. Limited liability.

Explanation
Partnerships are a type of business structure where two or more individuals share the ownership and management of a company. The characteristics of partnerships include co-ownership of property, mutual agency (where partners can act on behalf of the partnership), and limited life (where the partnership dissolves upon the death or withdrawal of a partner). However, partnerships do not have limited liability, meaning that partners are personally liable for the debts and obligations of the partnership. This means that their personal assets can be used to satisfy the partnership's debts.

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4.

Exclusive right to manufacture, sell or otherwise control an invention for a period of 20 years from the date of the grant.
- A.
  
  Patents
- B.
  
  Copyrights
- C.
  
  Franchises or licenses
- D.
  
  None of the above
Correct Answer
A. Patents

Explanation
A patent grants the exclusive right to manufacture, sell, or control an invention for a specific period of time, usually 20 years from the date of the grant. This means that the inventor has the sole authority to profit from their invention and prevent others from using, making, or selling it without their permission. Patents are a form of intellectual property protection that encourages innovation and allows inventors to benefit from their creations. Copyrights protect original works of authorship, while franchises or licenses are different business arrangements and not directly related to the exclusive rights of an invention.

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5.

A contingent liability should be recorded in the accounts when:
- A.
  
  it is probable the contingency will happen, but the amount cannot be reasonably estimated.
- B.
  
  It is reasonably possible the contingency will happen, and the amount can be reasonably estimated..
- C.
  
  It is probable the contingency will happen, and the amount can be reasonably estimated..
- D.
  
  It is reasonably possible the contingency will happen, but the amount cannot be reasonably estimated
Correct Answer
C. It is probable the contingency will happen, and the amount can be reasonably estimated..

Explanation
When a contingent liability is probable to occur and the amount can be reasonably estimated, it should be recorded in the accounts. This means that there is a high likelihood that the liability will materialize, and the company has enough information to make a reasonable estimate of the potential financial impact. By recording the contingent liability, the company ensures that its financial statements reflect the potential obligation and provides transparency to stakeholders.

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6.

Trademark or trade name has legal protection for indefinite number of 10 year renewal periods
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
Trademark or trade name has legal protection for indefinite number of 10-year renewal periods. This means that once a trademark or trade name is registered, the owner can renew the protection every 10 years without any limit. This allows the owner to maintain exclusive rights to use the trademark or trade name and prevent others from using it without permission. This protection helps to establish and maintain brand identity and prevent confusion among consumers.

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7.

Working capital = Current assets + Current liabilities.
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
The given statement is false. Working capital is calculated by subtracting current liabilities from current assets, not by adding them. The formula for working capital is Working capital = Current assets - Current liabilities.

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8.

When a partner invests non-cash assets in a partnership, the assets should be recorded at the book value.
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
When a partner invests non-cash assets in a partnership, the assets should not be recorded at the book value. Instead, they should be recorded at their fair market value. This is because the fair market value represents the current worth of the assets and provides a more accurate reflection of their value in the partnership's financial records. Recording the assets at book value may result in an inaccurate representation of the partnership's financial position.

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9.

Revenues that are received before the company delivers goods or provides services is called as Unearned Revenue.
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
Unearned revenue refers to the revenues that a company receives in advance before delivering goods or providing services. This means that the company has not yet earned the revenue, as the goods or services are yet to be provided. Therefore, the statement that "revenues that are received before the company delivers goods or provides services is called unearned revenue" is true.

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10.

Depreciation is the process of allocating the cost of intangible assets to the expense.
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
Depreciation is a method used to allocate the cost of intangible assets over their useful life. This process recognizes that these assets lose value over time and need to be expensed accordingly. By spreading the cost of the asset over its useful life, it allows for a more accurate representation of the asset's value on the balance sheet and the income statement. Therefore, the statement that "Depreciation is the process of allocating the cost of intangible assets to the expense" is true.

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Test Your Accounting Concepts Knowledge! Trivia Questions Quiz

Costs incurred to increase the operating efficiency, productive capacity, or useful life of a plant asset referred to as--------

Give the owner the exclusive right to reproduce and sell an artistic or published work.

All of the following are characteristics of partnerships except

Exclusive right to manufacture, sell or otherwise control an invention for a period of 20 years from the date of the grant.

A contingent liability should be recorded in the accounts when:

Trademark or trade name has legal protection for indefinite number of 10 year renewal periods

Working capital = Current assets + Current liabilities.

When a partner invests non-cash assets in a partnership, the assets should be recorded at the book value.

Revenues that are received before the company delivers goods or provides services is called as Unearned Revenue.

Depreciation is the process of allocating the cost of intangible assets to the expense.