Mega Accounting Test

36 Questions | Total Attempts: 1057

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Mega Accounting Test

Learn everything from A to Z about Accounting in this quiz. As you learn more in the field of accountancy, the need to take up proper revision also increases. The quiz below is designed to help you pass the accounting tests that are drawing nearer. Give it a go and all the best as you tackle the Mega Accounting Quiz!


Questions and Answers
  • 1. 
    A credit sale of $750 is made on June 13, term 2/10, net/30. A return of $50 is granted on June 16. The amount received as payment in full on June 23 is:
    • A. 

      $700

    • B. 

      $650

    • C. 

      $686

    • D. 

      $685

  • 2. 
    A single-step income statement:
    • A. 

      Reports gross profit.

    • B. 

      Reports sales revenue and "Other revenues and gains" in the revenues section of the income statement.

    • C. 

      Reports operating income separately.

    • D. 

      Does not report cost of goods sold.

  • 3. 
    In determining cost of goods sold:
    • A. 

      Freight-in added to net purchases.

    • B. 

      Freight-out is added to net purchases.

    • C. 

      Purchases returns and allowances are deducted from net purchases.

    • D. 

      Purchase discounts are deducted from net purchases.

  • 4. 
    If beginning inventory is $60,000, cost of goods purchased is $380,000, and ending inventory is $50,000, cost of goods sold is:
    • A. 

      $420,000

    • B. 

      $390,000

    • C. 

      $370,000

    • D. 

      $330,000

  • 5. 
    Sales revenue less cost of goods sold is called net profit.
    • A. 

      True

    • B. 

      False

  • 6. 
    In a perpetual inventory system, a company determines the cost of goods sold each time a sale occurs.
    • A. 

      True

    • B. 

      False

  • 7. 
    In a periodic inventory system, companies keep detailed inventory records of the goods on hand throughout the period.
    • A. 

      True

    • B. 

      False

  • 8. 
    FOB destination means that the seller places the goods free on board the common carrier and the buyer pays the freight costs.
    • A. 

      True

    • B. 

      False

  • 9. 
    Sales Returns and Allowances is a contra revenue account to Sales and has a normal debit balance.
    • A. 

      True

    • B. 

      False

  • 10. 
    A merchandiser using a perpetual system will require one additional adjusting entry to make the record agree with the actual inventory on hand.
    • A. 

      True

    • B. 

      False

  • 11. 
    The income statement for retailers contains one expense catergory just like the income statement of a service company.
    • A. 

      True

    • B. 

      False

  • 12. 
    A multiple-step income statement distinguishes between operating and non-operating activities.
    • A. 

      True

    • B. 

      False

  • 13. 
    Under a periodic system, the company uses seperate accounts to record freight costs, returns, and discounts.
    • A. 

      True

    • B. 

      False

  • 14. 
    There are more steps involved in preparing a worksheet for a merchandising company than for a service company.
    • A. 

      True

    • B. 

      False

  • 15. 
    The account Sales Discounts is a:
    • A. 

      Revenue account

    • B. 

      Expense account

    • C. 

      Contra revenue account

    • D. 

      Liability account

  • 16. 
    Net sales is sales less:
    • A. 

      Sales returns and allowances

    • B. 

      Sales discounts

    • C. 

      Sales returns & allowances and sales discounts

    • D. 

      Cost of goods sold

  • 17. 
    In a multiple-step income statement, which of the following would not be reported in the operating expenses section?
    • A. 

      Advertising expense

    • B. 

      Interest expense

    • C. 

      Freight-out

    • D. 

      All of the above are operating expenses

  • 18. 
    Which of the following is shown for both merchandising and service companies?
    • A. 

      Operating expenses

    • B. 

      Sales returns and allowances

    • C. 

      Gross profit

    • D. 

      Cost of goods sold

  • 19. 
    In a perpetual inventory system, which of the following would be debited when goods are purchased with the intent of being resold?
    • A. 

      Purchases

    • B. 

      Accounts Payable

    • C. 

      Cost of Goods Sold

    • D. 

      Merchandise Inventory

  • 20. 
    Income from operations is:
    • A. 

      Gross profit less operating expenses.

    • B. 

      Gross profit less other expenses and losses.

    • C. 

      Net sales less cost of goods sold.

    • D. 

      Net sales less operating expenses.

  • 21. 
    When preparing a worksheet for a merchandising company, which of the following accounts should not be reported in the Income Statement columns?
    • A. 

      Dividends

    • B. 

      Sales Discounts

    • C. 

      Depreciation Expense

    • D. 

      Cost of Goods Sold

  • 22. 
    Songbird Company has sales of $150,000 and cost of goods available for sale of $135,000. If the gross profit rate is 30%, the estimated cost of the ending inventory under the gross profit method is:
    • A. 

      $45,000

    • B. 

      $30,000

    • C. 

      $75,000

    • D. 

      $15,000

  • 23. 
    Manufacturing companies usually classify inventory into three catagories.
    • A. 

      True

    • B. 

      False

  • 24. 
    The FIFO method assumes that the earlies goods purchased are the first to be sold.
    • A. 

      True

    • B. 

      False

  • 25. 
    Under the lower of cost or market basis, market is defined as current replacement cost.
    • A. 

      True

    • B. 

      False

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