Quiz On Accounting - Chapters 1- 4

34 Questions

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Accounting Quizzes & Trivia

This test requires a lot of studying on the students’ part. The multiple answer questions given-below make it easier for one to revise and refresh their memory on what they have learnt so far. If you believe in yourself and are ready to solve these accounting questions, then give them a try. All the best!


Questions and Answers
  • 1. 
    To record revenue and expenses is the role of the...
    • A. 

      Income statement

    • B. 

      Balance Sheet

    • C. 

      Net worth

    • D. 

      Accounting statement

  • 2. 
    A balance sheet is a permanent record used to record revenue and expenses
    • A. 

      True

    • B. 

      False

  • 3. 
    • A. 

      True

    • B. 

      False

  • 4. 
    An increase or decrease in cash does not necessarily mean that net worth has increased or decreased
    • A. 

      True

    • B. 

      False

  • 5. 
    An accounting period can cover any period of time (i.e. one day, one quarter, one month, etc.)
    • A. 

      True

    • B. 

      False

  • 6. 
    Which of the following is true?
    • A. 

      When cash decreases, net worth will always decrease

    • B. 

      When cash increases, net worth will always increase

    • C. 

      When expenses decrease, net worth will decrease

    • D. 

      When revenue increases, net worth will increase

  • 7. 
    Acrrual accounting is recognizing revenue and expenses in the time period in which they occur, regardless of when the payment is received or made
    • A. 

      True

    • B. 

      False

  • 8. 
    If you sell an aset for $5,000 which is exactly what you paid for it, and the net worth before the sale was $15,000. The net worth will become $20,000 after the sale
    • A. 

      True

    • B. 

      False

  • 9. 
    The reduction in the value of your assets, which decreases net worth, is called depreciation expense.
    • A. 

      True

    • B. 

      False

  • 10. 
    Financial statements present the future events of the financial infomation
    • A. 

      True

    • B. 

      False

  • 11. 
    Gifts and lottery winnings, known as capital, are not part of everyday revenues and are therefore recorded directly to net worth instead of revenue account
    • A. 

      True

    • B. 

      False

  • 12. 
    Determining the value of an asset relative to net worth or how important it is to record the item as part of net worth is partially based on materiality
    • A. 

      True

    • B. 

      False

  • 13. 
    A transaction that involes the balance sheet will always impact net worth. 
    • A. 

      True

    • B. 

      False

  • 14. 
    You worked in June but did not get paid until July. Your net worth...
    • A. 

      Increases in July when you deposit the cheque

    • B. 

      Increases in June when you earned it

    • C. 

      Decreases in June because you did not deposit it

    • D. 

      Decreases in July after the bank accepts the cheque

  • 15. 
    If you receive a refund from a vendor for a prepaid expense, your net worth
    • A. 

      Stays the same

    • B. 

      Decreases

    • C. 

      Increases

    • D. 

      Non of the above

  • 16. 
    • A. 

      Depreciation expense decreases, an expense on the income statement increases and equity increases

    • B. 

      Cash decreases and equity decreases

    • C. 

      Depreciation expense decreases, an expense on the balance sheet increases and equity decreases

    • D. 

      Depreciation expense increases, an expense on the income statement increases and equity decreases

  • 17. 
    • A. 

      Prepaid expenses decrease, an expense on the income statement increases and equity increases

    • B. 

      Cash decreases and equity decreases

    • C. 

      Prepaid expenses decrease, an expense on the balance sheet increases and equity decreases

    • D. 

      Prepaid expenses decreases, an expense on the income statement increases and equity decreases

  • 18. 
    There are different terms to descrbibe the value (assets less liabilities) of a business, such as owner's equity, shareholder' equity, net assets and accumulated surpus (deficit)
    • A. 

      True

    • B. 

      False

  • 19. 
    The assets of a businss are listed in sequence according to their level of highest value?
    • A. 

      True

    • B. 

      False

  • 20. 
    There is no necessary relationship between a change in cash and a change in equity
    • A. 

      True

    • B. 

      False

  • 21. 
    Which of the following statements is incorrect?
    • A. 

      A partnership is a business owned by two or more persons

    • B. 

      A corporation is a business that is registered with the provincial and federal government is a separate legal entity from its owners, the shareholders

    • C. 

      A small business that is owned by one person is generally structured in the form of a proprietorship

    • D. 

      All the business debt is not considered as the owners debt when operation as a proprietary business

  • 22. 
    • A. 

      True

    • B. 

      False

  • 23. 
    Internal stakeholders own the business and/or work in the business. External stakeholders are the people or organizations that are outside the business such as suppliers, banks, tax authorities, external accountants or auditors
    • A. 

      True

    • B. 

      False

  • 24. 
    Which of the following would you not find on the financial statements of a business?
    • A. 

      Cash in bank

    • B. 

      Revenue

    • C. 

      Property, plant and equipment

    • D. 

      Owner's equity

    • E. 

      Net Worth

  • 25. 
    Whena company makes profits consistently each year, you can guarantee that there will be cash in the bank of the business
    • A. 

      True

    • B. 

      False

  • 26. 
    Accounting adjustments could be done to ensure all account values are properly reported. The typical adjusments include recognizing prepaid expenses, earned revenue and depreciation
    • A. 

      True

    • B. 

      False

  • 27. 
    Revenue and expenses should be recognized in the period when payments or receipts take place
    • A. 

      True

    • B. 

      False

  • 28. 
    A transit company sells tickets to its patrons for travel at a later date. The amount received when the tickets are sold should be treated as earned revenue
    • A. 

      True

    • B. 

      False

  • 29. 
    • A. 

      True

    • B. 

      False

  • 30. 
    If an accountant bills a client for services performed, the revenue increases and the asset increases
    • A. 

      True

    • B. 

      False

  • 31. 
    On January 1, a company received advanced membership payments of $500 from a customer for the next year. The membership is in effect immedialy. By how much would the company's equity have change by June 30th?
    • A. 

      400

    • B. 

      250

    • C. 

      500

    • D. 

      125

  • 32. 
    A new machine is bought in Junary for $10,000 and is depreciating over a 10 year period. There is no residual value. What will be the book value of the machine at the end of 4 years?
    • A. 

      4,000

    • B. 

      5,000

    • C. 

      6,000

    • D. 

      3,000

  • 33. 
    • A. 

      An increase in cash, decrease in accounts payable

    • B. 

      An increase in depreciation expense, decrease in machine

    • C. 

      An increase in depreciation expense, decrease in accumulative depreciation

    • D. 

      An increase in depreciation expense, increase in accumulative depreciation

  • 34. 
    A company prepaid $9,000 for 3 months on February 1, 2011, What would be the balance of the prepaid rent account on March 1, 2011
    • A. 

      3,000

    • B. 

      6,000

    • C. 

      9,000

    • D. 

      0