Quiz : How Much Do You Know About Accounting?
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Can you correctly answer all these accounting questions? We're curious to know how much you know about accounting! Take this quiz and test your knowledge now. Do you think you can get a high score on our super fun quiz? Give it a try. Please make sure to read all the questions carefully before answering. All the questions in the quiz are compulsory. Your scores will be reflected once you've completed attempting the quiz. Have fun and good luck!
Questions and Answers
- 1.
A record summarizing all the information pertaining to a single item in the accounting equation.
- A.
Account
- B.
Board of directors
- C.
Account title
- D.
Journal
Correct Answer
A. AccountExplanation
An account is a record that contains all the information related to a single item in the accounting equation. It summarizes the financial transactions and balances of a specific asset, liability, equity, revenue, or expense. Accounts are used to track and monitor the changes in the financial position of a business. They provide a detailed overview of the inflows and outflows of money and help in the preparation of financial statements. By maintaining accounts, businesses can accurately assess their financial performance and make informed decisions.Rate this question:
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- 2.
A group of persons elected by the stockholders to manage a corporation.
- A.
Cash Discount
- B.
Partnership
- C.
Board of directors
- D.
Receipt
Correct Answer
C. Board of directorsExplanation
The correct answer is board of directors. A board of directors is a group of individuals elected by the stockholders of a corporation to oversee and manage the company. They make important decisions, set policies, and provide guidance to the executive team. They are responsible for ensuring that the company operates in the best interest of its shareholders and stakeholders.Rate this question:
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- 3.
A deduction from the invoice amount, allowed by a vendor to encourage early payment.
- A.
Trade discount
- B.
Cash discount
- C.
Tax Discount
- D.
Discount
Correct Answer
B. Cash discountExplanation
A cash discount is a deduction from the invoice amount that a vendor allows to encourage early payment. This means that if the buyer pays the invoice within a specified time frame, they can avail of a discount on the total amount owed. This discount acts as an incentive for the buyer to make prompt payment and helps the vendor improve their cash flow by receiving payments earlier.Rate this question:
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- 4.
The percentage relationship between one financial statement and the total that includes that item.
- A.
Component discount
- B.
Cash discount
- C.
Trade discount
- D.
Component percentage
Correct Answer
D. Component percentageExplanation
The correct answer is "Component percentage." Component percentage refers to the percentage relationship between one financial statement and the total that includes that item. This means that it measures the proportion or contribution of a specific component to the overall total. It is commonly used in financial analysis to assess the significance of individual components within a larger context.Rate this question:
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- 5.
An amount recorded on the right side of a T account.
- A.
Credit
- B.
Debit
- C.
Account
- D.
Account title
Correct Answer
A. CreditExplanation
A credit is an amount recorded on the right side of a T account. In accounting, a credit entry is used to record increases in liabilities, owners' equity, and revenue, or decreases in assets and expenses. It represents the source of funds or the right side of an accounting equation. By recording credits, the balance in the account increases. Therefore, the correct answer is "Credit."Rate this question:
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- 6.
An amount recorded on the left side of a T account.
- A.
Debit
- B.
Credit
- C.
Account
- D.
Account title
Correct Answer
A. DebitExplanation
Debit is the correct answer because in accounting, a debit entry is recorded on the left side of a T account. A T account is a visual representation used to record transactions, with the left side representing debits and the right side representing credits. When an amount is recorded on the left side of a T account, it indicates an increase in assets or expenses, or a decrease in liabilities or revenue.Rate this question:
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- 7.
The length of time for which a business summarizes and reports financial information.
- A.
Time line
- B.
Fiscal period
- C.
Trail period
- D.
Temporary
Correct Answer
B. Fiscal periodExplanation
The correct answer is "Fiscal period" because it refers to the specific length of time for which a business summarizes and reports its financial information. It is a defined accounting period, usually a year, that is used to track and analyze the financial performance of a company. This period is important for financial reporting and decision-making purposes, as it allows stakeholders to assess the company's financial health and make informed decisions based on the reported information.Rate this question:
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- 8.
A ledger that contains all accounts needed to prepare financial statement.
- A.
General journal
- B.
Purchase journal
- C.
General ledger
- D.
Cash payment journal
Correct Answer
C. General ledgerExplanation
A general ledger is a ledger that contains all accounts needed to prepare financial statements. It is a comprehensive record of all financial transactions of a company, organized by account. The general ledger serves as the central repository for all financial information, allowing for the preparation of accurate and reliable financial statements. It includes accounts such as assets, liabilities, equity, revenue, and expenses. The general ledger is essential for financial reporting and provides a detailed overview of a company's financial position and performance.Rate this question:
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- 9.
A group of accounts.
- A.
Chart of accounts
- B.
General journal
- C.
General Ledger
- D.
Ledger
Correct Answer
D. LedgerExplanation
A ledger refers to a group of accounts that are used to record and track financial transactions. It is a book or a computerized system that contains individual accounts, such as cash, accounts receivable, and accounts payable, among others. The ledger provides a detailed record of all transactions, including debits and credits, and helps in preparing financial statements and analyzing the financial health of an organization. It is an essential component of the accounting process and ensures accurate and organized record-keeping.Rate this question:
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- 10.
A business in which two or more persons combine their assets and skill.
- A.
Partnership
- B.
Corporation
- C.
Company
- D.
Organization
Correct Answer
A. PartnershipExplanation
A partnership is a business structure where two or more individuals contribute their assets and skills to run a business together. In a partnership, the partners share the profits, losses, and responsibilities of the business. This type of business entity is often chosen when multiple individuals want to collaborate and work together, pooling their resources and expertise to achieve common goals. It offers flexibility, as partners can easily make decisions and manage the business collectively.Rate this question:
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- 11.
Determining that the amount of cash agrees with the accounting records.
- A.
Stock record
- B.
Adjustments
- C.
Real property
- D.
Proving cash
Correct Answer
D. Proving cashExplanation
Proving cash refers to the process of verifying that the amount of cash on hand or in a bank account matches the recorded amount in the accounting records. This is done by reconciling the cash transactions, such as deposits, withdrawals, and payments, with the corresponding entries in the accounting system. By proving cash, businesses can ensure the accuracy and integrity of their financial records, detect any discrepancies or errors, and prevent fraud or misappropriation of funds.Rate this question:
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- 12.
A business activity that changes assets, liabilities, or owner’s equity.
- A.
Transaction
- B.
Entry
- C.
Credit
- D.
Debit
Correct Answer
A. TransactionExplanation
A transaction refers to a business activity that involves the exchange or transfer of assets, liabilities, or owner's equity. It can include the purchase or sale of goods or services, the payment or receipt of cash, the borrowing or repayment of loans, or any other financial activity that affects the financial position of a business. Transactions are recorded in the accounting system through entries, which may involve debiting and crediting various accounts to reflect the changes in assets, liabilities, or owner's equity.Rate this question:
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- 13.
A cash discount on purchases taken by a customer.
- A.
Cash discount
- B.
Sales discount
- C.
Purchases discount
- D.
Tax discount
Correct Answer
C. Purchases discountExplanation
A purchases discount refers to a cash discount that is given to a customer on their purchases. This means that when a customer makes a purchase, they are offered a discount on the total amount they need to pay. This discount is usually given as an incentive to encourage customers to make larger purchases or to pay their bills quickly. By offering a purchases discount, businesses can attract more customers and improve their cash flow.Rate this question:
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- 14.
A listing of customer accounts, account balances, and total amount due from all customers.
- A.
Trial balance
- B.
Schedule of Account receivable
- C.
Fiscal period
- D.
Schedule of Account payable
Correct Answer
B. Schedule of Account receivableExplanation
The given answer "Schedule of Account receivable" is the correct answer because it accurately describes a listing of customer accounts, account balances, and total amount due from all customers. This schedule is used by businesses to keep track of the amounts owed to them by their customers. It helps in managing and monitoring the accounts receivable and ensures that all outstanding payments are collected in a timely manner.Rate this question:
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- 15.
A listing of all vendor accounts, account balances, and total amount due all vendors.
- A.
Schedule of Account payable
- B.
Trail balance
- C.
Fiscal period
- D.
Schedule of Account receivable
Correct Answer
A. Schedule of Account payableExplanation
The correct answer is "Schedule of Account payable". This is because the question asks for a listing of all vendor accounts, account balances, and the total amount due to all vendors. The Schedule of Account payable is a report that provides this information, showing the amounts owed to each vendor and the total amount due.Rate this question:
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- 16.
A form used to show the kind of Merchandise, quantity received, quantity sold, and balance on hand.
- A.
General ledger
- B.
Ledger
- C.
Stock record
- D.
General journal
Correct Answer
C. Stock recordExplanation
A stock record is a form used to track and record the kind of merchandise, the quantity received, the quantity sold, and the balance on hand. It helps in maintaining accurate inventory records and managing stock levels effectively. A general ledger is a complete record of all financial transactions of a business, while a ledger is a book or computerized record used to keep track of individual accounts. A general journal is used to record non-routine transactions and adjustments.Rate this question:
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- 17.
A ledger that is summarized in a single general ledger account.
- A.
Subsidiary ledger
- B.
General Ledger
- C.
Account receivable ledger
- D.
Account payable ledger
Correct Answer
A. Subsidiary ledgerExplanation
A subsidiary ledger is a detailed record of transactions for a specific account or group of accounts. It provides a more detailed breakdown of the transactions that make up the balance in a general ledger account. In this case, a ledger that is summarized in a single general ledger account refers to a subsidiary ledger, as it contains the summarized information for a specific account or group of accounts. The other options, such as the general ledger, account receivable ledger, and account payable ledger, do not fit the description of being summarized in a single general ledger account.Rate this question:
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- 18.
Accounts used to accumulate information until it is transferred to the owner’s capital Account.
- A.
Trail balance
- B.
General ledger
- C.
Temporary account
- D.
Fiscal period
Correct Answer
C. Temporary accountExplanation
A temporary account is used to accumulate information until it is transferred to the owner's capital account. Temporary accounts are used to record revenues, expenses, and withdrawals for a specific fiscal period. At the end of the period, these temporary accounts are closed and their balances are transferred to the owner's capital account. This allows for the tracking and organization of financial information, ensuring that it is properly allocated and summarized for the owner's capital account.Rate this question:
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- 19.
A proof of the equality of debits and credits in a general ledger.
- A.
General ledger
- B.
Ledger
- C.
Temporary account
- D.
Trail balance
Correct Answer
D. Trail balanceExplanation
A trial balance is a statement that lists all the accounts in the general ledger along with their debit or credit balances. It is used to ensure that the total debits equal the total credits, thus proving the equality of debits and credits in the general ledger. The trial balance is prepared before the financial statements are finalized and helps in identifying any errors or discrepancies in the recording of transactions.Rate this question:
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- 20.
Land and anything attached to the land.
- A.
Adjustments
- B.
Real property
- C.
Chart of accounts
- D.
Stock record
Correct Answer
B. Real propertyExplanation
Real property refers to land and anything permanently attached to it, such as buildings and structures. This includes not only the physical property but also the rights and interests associated with it. Real property is a legal term used to distinguish it from personal property, which includes movable assets. It is an important concept in property law and is often subject to various regulations and ownership rights.Rate this question:
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- 21.
A special journal used to record only sales of 1S of merchandise on account.
- A.
Sales journal
- B.
Purchases journal
- C.
General ledger
- D.
General journal
Correct Answer
A. Sales journalExplanation
A sales journal is a special journal used to record only sales of merchandise on account. This journal is specifically designed to track and record sales transactions made on credit, where customers purchase goods but do not make immediate payment. It helps to organize and streamline the recording process for sales made on account, making it easier to track and analyze sales data. The other options, such as purchases journal, general ledger, and general journal, do not specifically focus on recording sales transactions on account.Rate this question:
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- 22.
Changes recorded on a work sheet to update general ledger account at the end of a fiscal period.
- A.
Account balance
- B.
Transaction
- C.
Adjustments
- D.
Ledger
Correct Answer
C. AdjustmentsExplanation
Adjustments are changes recorded on a work sheet to update general ledger accounts at the end of a fiscal period. These adjustments are necessary to ensure that the account balances accurately reflect the financial transactions and events that have occurred during the period. By making adjustments, any errors or omissions in the ledger can be corrected, and the financial statements can provide a true and fair view of the company's financial position and performance.Rate this question:
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- 23.
The value of an asset determined by tax authorities for the purpose of calculating taxes.
- A.
Trial balance
- B.
Account balance
- C.
Real property
- D.
Assessed value
Correct Answer
D. Assessed valueExplanation
Assessed value refers to the value of an asset that is determined by tax authorities for the purpose of calculating taxes. This value is used to determine the amount of tax that an individual or business needs to pay on a particular asset. It is usually based on factors such as the market value of the asset, its condition, and any improvements made to it. The assessed value may differ from the actual market value of the asset and is used solely for tax calculation purposes.Rate this question:
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- 24.
The amount in an account.
- A.
Assessed value
- B.
Account balance
- C.
Trial balance
- D.
Stock record
Correct Answer
B. Account balanceExplanation
The correct answer is "Account balance" because it refers to the total amount of money or assets in an account at a specific point in time. It represents the net value of the account after all debits and credits have been accounted for. The assessed value refers to the value assigned to a property for tax purposes, trial balance is a list of all the general ledger accounts and their balances, and stock record is a document that tracks the movement and quantity of stock items.Rate this question:
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- 25.
A list of accounts used by a business.
- A.
Chart of accounts
- B.
Account balance
- C.
Schedule of accounts
- D.
Temporary accounts
Correct Answer
A. Chart of accountsExplanation
A chart of accounts is a comprehensive list of all the accounts used by a business to record its financial transactions. It provides a systematic framework for organizing and categorizing the various accounts, such as assets, liabilities, equity, revenue, and expenses. This allows for easy tracking and analysis of the financial health of the business. The other options mentioned, such as account balance, schedule of accounts, and temporary accounts, do not specifically refer to a list of accounts used by a business.Rate this question:
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- 26.
Total shares of ownership in a corporation.
- A.
Dividends
- B.
General ledger
- C.
Capital stock
- D.
Ledger
Correct Answer
C. Capital stockExplanation
Capital stock refers to the total shares of ownership in a corporation. It represents the ownership interest that shareholders have in the company and represents their claim on the company's assets and earnings. Dividends, on the other hand, are the payments made to shareholders as a distribution of the company's profits. General ledger and ledger are accounting tools used to record and track financial transactions. Therefore, the correct answer is capital stock, as it specifically refers to the total shares of ownership in a corporation.Rate this question:
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- 27.
An account in a general ledger that summarizes all accounts in a subsidiary ledger.
- A.
Controlling account
- B.
Corporation
- C.
Trail accounts
- D.
Mark up
Correct Answer
A. Controlling accountExplanation
A controlling account is an account in a general ledger that summarizes all accounts in a subsidiary ledger. It acts as a summary or overview of the subsidiary ledger, providing a consolidated view of the accounts within it. This allows for easier management and analysis of the subsidiary ledger accounts, as all relevant information is condensed into one controlling account.Rate this question:
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- 28.
An organization with the legal rights of a person and which may be owned by many persons.
- A.
Realization
- B.
Dividends
- C.
Partnership
- D.
Corporation
Correct Answer
D. CorporationExplanation
A corporation is an organization that has the legal rights of a person and can be owned by multiple individuals. This means that a corporation can enter into contracts, sue or be sued, and engage in other legal activities just like an individual person. Additionally, ownership of a corporation is typically represented by shares of stock, which can be bought and sold by investors. Therefore, a corporation is the correct answer as it aligns with the description provided.Rate this question:
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- 29.
Earnings distributed to stockholders.
- A.
Shares
- B.
Dividends
- C.
Mark up
- D.
Par value
Correct Answer
B. DividendsExplanation
Dividends are the earnings distributed to stockholders as a return on their investment in a company. When a company generates profits, it may choose to distribute a portion of those profits to its stockholders in the form of dividends. Dividends are typically paid out on a regular basis, such as quarterly or annually, and can be in the form of cash or additional shares of stock. This provides stockholders with a direct financial benefit and is one way for companies to reward their shareholders for their investment.Rate this question:
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- 30.
A form for recording transactions in chronological order.
- A.
Sales journal
- B.
General ledger
- C.
General journal
- D.
Journal
Correct Answer
D. JournalExplanation
The correct answer is "Journal". A journal is a form used to record transactions in chronological order. It serves as a primary record-keeping tool for businesses to track their financial transactions. The journal includes details such as the date, description, and amount of each transaction. By maintaining a journal, businesses can easily track and analyze their financial activities. The other options, such as the sales journal, general ledger, and general journal, are related to specific types of journals used in accounting but do not encompass the broader concept of a journal.Rate this question:
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- 31.
The process of paying a partnership’s liabilities and distributing assets to the partners.
- A.
Mark up
- B.
Liquidation
- C.
Posting
- D.
Receipt
Correct Answer
B. LiquidationExplanation
Liquidation refers to the process of paying off a partnership's debts and distributing its remaining assets to the partners. This typically occurs when a partnership is dissolved or goes bankrupt. During liquidation, the partnership's liabilities are settled by using its available funds, and any remaining assets are distributed among the partners according to their ownership interests. This process ensures that all debts are paid and any remaining funds are fairly distributed among the partners.Rate this question:
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- 32.
The amount added to the cost of merchandise to establish the selling price.
- A.
Mark up
- B.
Posting
- C.
Journal
- D.
Par value
Correct Answer
A. Mark upExplanation
The term "mark up" refers to the amount added to the cost of merchandise in order to establish the selling price. This is a common practice in retail and business, where the selling price needs to cover not only the cost of the merchandise but also additional expenses and profit margin. By adding a mark up to the cost, businesses ensure that they can cover their costs and make a profit from each sale. Therefore, "mark up" is the correct answer for the given question.Rate this question:
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- 33.
Goods that a merchandising business purchases to sell.
- A.
Mark up
- B.
Posting
- C.
Merchandise
- D.
T account
Correct Answer
C. MerchandiseExplanation
The term "merchandise" refers to the goods that a merchandising business purchases with the intention of selling them to customers. This can include a wide range of products, such as clothing, electronics, or groceries. By selecting "Merchandise" as the correct answer, it implies that this term accurately describes the goods that a merchandising business acquires for the purpose of resale.Rate this question:
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- 34.
Transferring information from a journal entry to a ledger account.
- A.
Posting
- B.
Receipt
- C.
Mark up
- D.
Merchandise
Correct Answer
A. PostingExplanation
Posting is the process of transferring information from a journal entry to a ledger account. It involves recording the relevant details of a transaction, such as the date, description, and amount, into the appropriate account in the ledger. This helps to keep track of the financial transactions of a business and maintain accurate records. By posting the information, it becomes easier to analyze and summarize the financial data, and to prepare financial statements.Rate this question:
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- 35.
A value assigned to a share of stock and printed on the stock.
- A.
Cost value
- B.
Mark up
- C.
Par value
- D.
Assessed value
Correct Answer
C. Par valueExplanation
Par value is the value assigned to a share of stock and printed on the stock. It represents the nominal or face value of the stock and is typically a fixed amount determined by the company issuing the stock. This value is important for accounting and legal purposes, as it determines the minimum price at which the stock can be issued or sold. It is different from the market value of the stock, which is determined by supply and demand in the stock market.Rate this question:
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- 36.
Each member of a partnership.
- A.
Partnership
- B.
Corporation
- C.
Dividends
- D.
Shares
Correct Answer
A. PartnershipExplanation
A partnership is a type of business structure where two or more individuals come together to run a business and share the profits and losses. In a partnership, each member has equal rights and responsibilities in the business. This is different from a corporation, which is a legal entity separate from its owners. Dividends are payments made to shareholders of a corporation, while shares represent ownership in a corporation. Therefore, the correct answer is partnership because it is a type of business structure.Rate this question:
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- 37.
Cash received from the sale ODF assets during liquidation of a partnership.
- A.
Partnership
- B.
Posting
- C.
Realization
- D.
Work sheet
Correct Answer
C. RealizationExplanation
The term "realization" refers to the process of converting assets into cash during the liquidation of a partnership. When a partnership is being dissolved, the partners sell off the partnership's assets to generate cash. This cash is then distributed among the partners according to their ownership interests. Therefore, the correct answer is "realization" because it accurately describes the cash received from the sale of assets during the liquidation of a partnership.Rate this question:
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- 38.
A business form giving written acknowledgement for cash received.
- A.
Mark up
- B.
Receipt
- C.
Journal
- D.
Par value
Correct Answer
B. ReceiptExplanation
A receipt is a business form that provides written acknowledgement for cash received. It is a document that serves as proof of payment and is typically issued by a seller to a buyer after a transaction has been completed. The receipt includes details such as the amount of cash received, the date of the transaction, and any other relevant information. This helps both parties keep track of their financial transactions and provides a record for future reference or for accounting purposes.Rate this question:
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- 39.
A cash discount on sale.
- A.
Trade discount
- B.
Purchases discount
- C.
Tax discount
- D.
Sales discount
Correct Answer
D. Sales discountExplanation
A cash discount on sale refers to a reduction in the price of a product or service that is offered to customers as an incentive for prompt payment. It is commonly used to encourage customers to pay their invoices quickly, thus improving cash flow for the seller. This type of discount is known as a sales discount because it is directly related to the sales transaction.Rate this question:
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- 40.
The account used to A business owned by one person.
- A.
Posting
- B.
Capital
- C.
Par value
- D.
Account receivable
Correct Answer
B. CapitalExplanation
The term "Capital" refers to the account used to record the owner's investment in a business. In this context, it specifically refers to a business owned by one person, as mentioned in the question. The capital account tracks the initial investment made by the owner, as well as any additional investments or withdrawals made over time. It represents the owner's equity in the business and is an important component of the company's financial statements.Rate this question:
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- 41.
An accounting device used to analyze transactions.
- A.
Journal
- B.
Capital
- C.
Stock ledger
- D.
T account
Correct Answer
D. T accountExplanation
A T account is an accounting device used to analyze transactions. It is a visual representation of a general ledger account that shows the debits on the left side and the credits on the right side. By using T accounts, accountants can easily track and analyze the changes in specific accounts and determine their balances. This allows for a clear and organized presentation of financial information, making it easier to understand and interpret the impact of transactions on individual accounts.Rate this question:
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- 42.
A columnar accounting form used to summarize the general ledger information needed to prepare F. Statement.
- A.
Journal
- B.
Work sheet
- C.
General ledger
- D.
General journal
Correct Answer
B. Work sheetExplanation
A work sheet is a columnar accounting form used to summarize the general ledger information needed to prepare financial statements. It is a tool that helps in organizing and analyzing financial data before finalizing the financial statements. It includes information such as trial balances, adjustments, and closing entries. By using a work sheet, accountants can ensure accuracy and completeness in the preparation of financial statements.Rate this question:
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- 43.
A file of stock records for all merchandise on hand
- A.
Stock ledger
- B.
Capital
- C.
General ledger
- D.
Ledger
Correct Answer
A. Stock ledgerExplanation
The correct answer is "Stock ledger". A stock ledger is a file or record that contains all the information about the merchandise or stock that a company has on hand. It includes details such as the quantity, value, and location of the stock. It is an important tool for inventory management and helps in tracking and monitoring the stock levels accurately. The other options mentioned (Capital, General ledger, and Ledger) are not specifically related to stock records and do not provide the same level of detail and specificity as a stock ledger.Rate this question:
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