Can You Pass This Accounting Test? Trivia Questions Quiz

40 Questions | Total Attempts: 28

Settings
Please wait...
Can You Pass This Accounting Test? Trivia Questions Quiz

Can You Pass This Accounting Test? Accounting is the practice of preparing records that show the financial position of an organization using the laid down standards both internationally and locally. Do you consider yourself a capable accountant? The test will tell you if you need some refresher quizzes to perfect your skills. Be sure to give it a try!


Questions and Answers
  • 1. 
    A detailed report that companies file annually with the SEC is the
    • A. 

      10-q report

    • B. 

      10-k report

    • C. 

      Registration statement

    • D. 

      8-k report

  • 2. 
    The elements of financial position do not include 
    • A. 

      Assets

    • B. 

      Liabilities

    • C. 

      Owners' equity

    • D. 

      Financing activities

  • 3. 
    The financial accounting standards board
    • A. 

      Is a government regulatory agency

    • B. 

      Sponsors and encourages the improvement of accounting teaching and research

    • C. 

      Deals primarily with tax reporting problems with the IRS

    • D. 

      Is a private sector organization that develops accounting principles

  • 4. 
    The matching concept states that
    • A. 

      Net income is determined by linking operating cash receipts with operating cash payments

    • B. 

      Assets are linked with liabilities and owners' equity in the balance sheet

    • C. 

      Net income is determined by linking expenses incurred with related revenues earned

    • D. 

      Owner contributions and owner withdrawals are linked in the statement (owners' equity)

  • 5. 
    Which of the following statements is true?
    • A. 

      The income statement shows the financial position of an entity as of a specific date

    • B. 

      The income statement shows the financial position of an entity for a specific period of time

    • C. 

      The balance sheet shows the financial position of an entity as of a specific date

    • D. 

      The balance sheet shows the financial position of an entity for a specific period of time

  • 6. 
    The income statement is designed to
    • A. 

      Report on solvency of a business entity

    • B. 

      Report on the profitability of a business entity

    • C. 

      Report on economic resources of a business entity

    • D. 

      Report on the stability of a business entity

  • 7. 
    All entries that record transactions which recognize revenue as earned also record a/an
    • A. 

      Increase in liabilities

    • B. 

      Decrease in assets

    • C. 

      Decrease in retained earnings

    • D. 

      Increase in assets

    • E. 

      None of the above

  • 8. 
    Which of the following transactions does not affect the assets of Marie corp?
    • A. 

      A bill is received for electricity used by Marie during the past month

    • B. 

      Dividends are paid by Marie

    • C. 

      Customers are billed for sales made on credit by Marie

    • D. 

      Payment is received by Marie from customers who are paying their account balances for credit sales recorded earlier

  • 9. 
    Which of the following financial statements is a period statement 
    • A. 

      Income statement

    • B. 

      Statement of retained earnings

    • C. 

      Statement of cash flows

    • D. 

      All of the above

    • E. 

      None of the above

  • 10. 
    All temporary ledger accounts are ultimately
    • A. 

      Closed

    • B. 

      Adjusted

    • C. 

      Dissolved

    • D. 

      An explicit component of the balance sheet

  • 11. 
    After the closing process is completed 
    • A. 

      All temporary accounts will have a zero balance

    • B. 

      The balance in retained earnings account is appropriate for the balance sheet

    • C. 

      All accounts with a non-zero balance will be a component of the balance sheet

    • D. 

      All of the above are correct

  • 12. 
    The payment of a liability.
    • A. 

      Decreases assets and owners' equity

    • B. 

      Increases assets and decreases liabilities

    • C. 

      Decreases assets and increases liabilities

    • D. 

      Decreases assets and liabilities

  • 13. 
    Which of the following items has no effect on owners' equity?
    • A. 

      Expense

    • B. 

      Dividend declared and paid

    • C. 

      Land purchased

    • D. 

      Revenue

  • 14. 
    Sanford Realty Corp had the following balance sheet accounts and balances: a/p 6000 a/r 1000 building ? Cash 3000 equipment 7000 common stock ? land 7000 retained earnings 2000 If the balance in the common stock account were 19000 what would be the amount of the building account?
    • A. 

      25000

    • B. 

      4000

    • C. 

      9000

    • D. 

      21000

  • 15. 
    If the balance sheet accounts showed an amount of $17000 in the building account, what would be the total of liabilities and stockholders' equity 
    • A. 

      $17000

    • B. 

      $27000

    • C. 

      $32000

    • D. 

      $35000

  • 16. 
    The statement of cash flows would disclose the payment of a dividend
    • A. 

      Nowhere in the statement

    • B. 

      In the operating activities section

    • C. 

      In the investing activities section

    • D. 

      In the financing activities section

  • 17. 
    Unearned revenues are recorded by companies that
    • A. 

      Pay money in advance of the performance of a service

    • B. 

      Pay money at the time of a service is complete

    • C. 

      Receive money in advance in advance of the performance of a service

    • D. 

      Receive money at the time the performance of a service is compete

  • 18. 
    Which of the following does not contain retained earnings
    • A. 

      Investments by stockholders

    • B. 

      Declaration and payment of dividends

    • C. 

      Earnings of revenues

    • D. 

      Incurring of expenses

  • 19. 
    The dividends account appears on 
    • A. 

      The statement of retained earnings only

    • B. 

      The income statement only

    • C. 

      The balance sheet only

    • D. 

      Both the income statement and the balance sheet

  • 20. 
    Which of the following events would not require a journal entry?
    • A. 

      Purchase of a one-year insurance entry

    • B. 

      Agreement to perform a service at a future date

    • C. 

      Performance of a service agreed to at a past date

    • D. 

      Payment for a service performed previously

  • 21. 
    When a company receives an electric bill but will not be paying it right away, it should
    • A. 

      Debit utility expense and credit a/r

    • B. 

      Debit utility expense and credit a/p

    • C. 

      Debit a/p and credit utility expense

    • D. 

      Make no entry until the bill is paid

  • 22. 
    The process of transferring journal entry information from the journal to the ledger is called
    • A. 

      Journalizing

    • B. 

      Posting

    • C. 

      Analyzing

    • D. 

      Footing

  • 23. 
    Which of the following errors will not cause the debit and credit columns of a trial balance to be unequal 
    • A. 

      Only part of a journal entry was posted

    • B. 

      A debit posted to an account as a credit

    • C. 

      A journal entry was accidentally posted twice

    • D. 

      The trial balance was incorrectly summed

  • 24. 
    Which of the following accounts is a nominal account
    • A. 

      A/r

    • B. 

      Wages payable

    • C. 

      Common stock

    • D. 

      Wages expense

  • 25. 
    Which of the following accounts is a permanent account?
    • A. 

      Depreciation expense

    • B. 

      Dividends

    • C. 

      Accumulated depreciation

    • D. 

      Advertising fees earned

  • 26. 
    The Store Supplies account had a $180 debit balance at the end of the accounting period before adjustment for supplies used, and an inventory of $40 worth of unused supplies was on hand. Which of the following is the required adjusting entry?
    • A. 

      Debit store supplies expense $40 and credit store supplies $40

    • B. 

      Debit store supplies $40 and credit store supplies expense $40

    • C. 

      Debit store supplies $140 and credit store supplies expense $140

    • D. 

      Debit store supplies expense $140 and credit store supplies $140

  • 27. 
    A company recorded office supplies in an asset account when the supplies were purchased. failure to take inventory and make and adjusting entry will result in 
    • A. 

      Understatement of assets

    • B. 

      Understatement of stockholders' equity

    • C. 

      Overstatement of stockholders' equity

    • D. 

      Understatement of liabilities

  • 28. 
    Which of the following accounts would be found on the credit side of the trial balance?
    • A. 

      Prepaid insurance

    • B. 

      Depreciation expense

    • C. 

      Dividends

    • D. 

      Accumulated depreciation

  • 29. 
    The purpose of an audit is to 
    • A. 

      Comply with income tax regulations

    • B. 

      Determine whether or not a company is a good investment

    • C. 

      Determine whether or not a company is a good credit risk

    • D. 

      Ascertain that the financial statements follow GAAP

  • 30. 
    On June 30, a company paid $3600 for insurance premiums for the current year and debited the amount to prepaid insurance. At december 31 the bookkeeper forgot to record the amount expired. The omission has the following effect on the financial statements prepared Dec 31
    • A. 

      Overstates owners' equity

    • B. 

      Overstates assets

    • C. 

      Understates net income

    • D. 

      Both a and b

  • 31. 
    An example of an adjusting entry involving a deferred (unearned revenue) revenue:
    • A. 

      Cash/dr, unearned rental revenue/cr

    • B. 

      Rental revenue/dr, cash/cr

    • C. 

      Unearned rental revenue/dr, rental revenue/cr

    • D. 

      A-r/dr, sales/cr

  • 32. 
    L. Lane received $12000 from a tenant on Dec 1 for four months rent of an office. This rent was for Dec, Jan, Feb and March. If lane debited Cash and credited unearned rental income for $12000 on Dec 1, what necessary adjustment would be made on Dec 31
    • A. 

      Unearned rental income/dr (3000), rental income/cr (3000)

    • B. 

      Rental income/dr (3000), unearned rental income/cr (3000)

    • C. 

      Unearned rental income/dr (9000), rental income/cr (9000)

    • D. 

      Rental income/dr (9000), unearned rental income/cr (9000)

  • 33. 
    Ingle Company paid $12960 for a four-year insurance policy on sept 1 and recorded the $12960 as a debit to prepaid insurance and credit to cash. What adjusting entry should Ingle make on Dec 31, the end of the accounting period?
    • A. 

      Prepaid insurance/dr (810), insurance expense/cr (810)

    • B. 

      Insurance expense/dr (1080), prepaid insurance/cr (1080)

    • C. 

      Insurance expense/dr (3240), prepaid insurance/cr (3240)

    • D. 

      Prepaid insurance/dr (11880), insurance expense/cr (11880)

  • 34. 
    Unearned rent would normally appear on the balance sheet as a 
    • A. 

      Plant asset

    • B. 

      Current liability

    • C. 

      Long-term liability

    • D. 

      Current asset

  • 35. 
    On Aug 1, 2004, Gann Company signed a $5000, two-year, 10% note payable. At due date, July 31, 2006, the principal and interest will be paid in full. Interest expense should be reported on the income statement for the year ended Dec 31, 2004, in the amount of. 
    • A. 

      $292

    • B. 

      $208

    • C. 

      $500

    • D. 

      $250

    • E. 

      $167

  • 36. 
    GEM Corp reported the following for 19A: Revenues...... $100,000 Expenses....... $90,000 Capital stock, par $5.... $25,000 What was the amount of earnings per share 
    • A. 

      $1.20

    • B. 

      $1.40

    • C. 

      $2.00

    • D. 

      $4.67

    • E. 

      $4.00

  • 37. 
    On Jan 2, 2004 BD Company purchased a machine that cost $14,000 and had an estimated useful life of 10 years (no residual value). The book value at the end of 2009, would be 
    • A. 

      $14,000

    • B. 

      $2,100

    • C. 

      $5,600

    • D. 

      $5,000

    • E. 

      None of the above are correct

  • 38. 
    At the end of 2003, TK Corporation reported an ending balance for retained earnings of $70,000. During 2004, the company reported the following amounts: dividends, declared and paid, $30,000 and net income, $48,000. The 2004 statement of retained earnings should report the following ending balance:
    • A. 

      $18,000

    • B. 

      $70,000

    • C. 

      $88,000

    • D. 

      $118,000

    • E. 

      None of the above are correct

  • 39. 
    If the total amount of common stock outstanding (par $10) was $10,000 and the Additional paid in capital in excess of par was $6,000, the issue price per share of stock was: 
    • A. 

      $3.00

    • B. 

      $3.50

    • C. 

      $16.00

    • D. 

      $5.00

    • E. 

      $10.00

  • 40. 
    Dodge corporation reported total assets of $2,500,000, total current liabilities of $900,000, and total long-term liabilities of $500,000. Therefore, the stockholders' equity was:
    • A. 

      $3,900,000

    • B. 

      $1,100,000

    • C. 

      $2,500,000

    • D. 

      $2,000,000

    • E. 

      Cannot be determined from the information given above