Your Accounting Skill Test

20 Questions | By ReynaldoJPA | Last updated: Mar 21, 2022 | Total Attempts: 604

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As an accounting student, you need to ensure that you are up to date with what you study. This accounting test is specially created to test your accounting skills with intermediate level questions. Only the brightest of accounting students can pass this quiz, so give it a try. Give it a try!

Questions and Answers

1.

Using the FIFO method answer the following question. A company purchases 25 units at a price of $5 each. Then they purchase 10 units at the price of $4 each. Afterwards, they sell 30 units at a price of $10 each. Then they sell 2 units at a price of $15. Then they sell 3 units at the price of $15 each. What is the COGS?
- A.
  
  $165
- B.
  
  $375
- C.
  
  $465
- D.
  
  None of the above
2.

A company uses the periodic inventory system and they count their inventoy at the end of each month. On October 1st, 2012 they have 40 units in stock. They sell 25 on October 10th, 2012, and made profit in each of those sales. On October 20th, 2012, they sold 5 units but did not profit out of them. On November 7th, 2012, they sold 3 units and made a huge profit. How many units they have in the inventory on November the 8th, 2012?
- A.
  
  40
- B.
  
  7
- C.
  
  10
- D.
  
  58
3.

Using the weigthed average system determine the COGS. A company buys 15 units at a price of $1 each on October 10th. Then they buy 5 units at a price of $2 on October 15th. Calculate the COGS for the total sales during October
- A.
  
  $25
- B.
  
  $20
- C.
  
  $1.25
- D.
  
  None of the above
4.

Dealerships use the FIFO method to value their inventory
- A.
  
  True
- B.
  
  False
5.

Which of the following methods for valuing inventory would most likely be used for standardized materials such as oil used in making gasoline?
- A.
  
  Weighted average method
- B.
  
  Specific identification method
- C.
  
  FIFO
- D.
  
  None of the above
6.

Products in a nelectronic store consist of the following: 30 TV's purchased in January at a cost ot $100 each and 40 TV's purchased in February at a cost of $150 each. They are NOT the same model. Using the FIFO inventory method, what would the remaining value of inventory be if 20 TV's were sold?
- A.
  
  $1,000
- B.
  
  $9,000.
- C.
  
  $7,000
- D.
  
  $5,000
7.

The two systems of measuring inventory are:
- A.
  
  FIFO and Specific identification
- B.
  
  FIFO and weighted average
- C.
  
  Periodic and Perpetual
- D.
  
  There are more than two systems to measure the inventory levels
8.

The two methods of valuing the inventory within a company are
- A.
  
  FIFO and Specific Identification
- B.
  
  FIFO and Weighted average
- C.
  
  Periodic and Perpetual
- D.
  
  There are more than two systems to value the inventory
9.

Which of the following is a current asset on the financial stataments of a business
- A.
  
  Inventory
- B.
  
  Property, plant and equipment
- C.
  
  Unearned Revenue
- D.
  
  Owner's Drawings
10.

Under the perpetual inventory system, which of the following statements is correct?
- A.
  
  The perpetual inventory system immediately matches the cost of goods sold to all the sale
- B.
  
  Cost of goods sold is calculated at the end of the accounting period
- C.
  
  The purchase account is maintained under the perpetual system
- D.
  
  Inventory is updated at the end of the accounting period
11.

Revenue less gross proft equals to:
- A.
  
  Cost of goods sold
- B.
  
  Net income
- C.
  
  Gross profit
- D.
  
  The equation makes absolutely no sense
12.

On may 1, a retail store purchased $4,000 worth of product from a supplier on account. A protion of the goods was defective so on May 5, the retail store returned 20% of the product, Whih of the following journal entries should the retail store prepare to record the transaction on May 5th?
- A.
  
  Debit accounts playable, credit inventory
- B.
  
  Debit accounts payable, credit returns
- C.
  
  Debit accounts receivable, credit inventory
- D.
  
  None of the above
13.

Mary operates a wholesale business that distributes canned food. She received a complain from a customer and accepts $2,500 worth of product back from the customer that was billed on account. The cost of the product is $800. Which of the following entries is correct?
- A.
  
  Debit Sales returns and allowances, Credit Accounts Receivable, Debit inventory, Credit COGS
- B.
  
  Debit Accounts Receivable, Credit Sales Returns and Allowances, Debit inventory, Credit COGS
- C.
  
  Can be A or B
- D.
  
  None of the above
14.

Check all applicable boxes - as a result of inventory shrinkage:
- A.
  
  Equity decreases
- B.
  
  Inventory decreases
- C.
  
  COGS decreases
- D.
  
  Revenue decreases
15.

A company experiences inventory shrinkage and records the proper entry to account for it. As a result of this entry:
- A.
  
  Gross profit will decrease and net income will decrease
- B.
  
  Gross profit will increase, but net income will decrease
- C.
  
  Both gross profit and net income will decrease
- D.
  
  Gross profit and net income will not be affected by shrinkage
16.

When shipping a product that was already paid by the customer in the previous month, the transaction should be recorded as:
- A.
  
  Debit to cash, Credit to revenue
- B.
  
  Debit to accounts receivable, Credit to revenue
- C.
  
  Debit to accounts payable, Credit to revenue
- D.
  
  Credit to revenue only
17.

A company sells $7,000 inventory on account to a customer. The inventory has a cost of $2,200. What would be the correct journal entry to record the sale?
- A.
  
  Debit cash $7,000. Credit Sales $7,000. Debit COGS $2,200. Credit Inventory $2,200
- B.
  
  Debit accounts receivable $7,000. Credit Sales $7,000. Debit COGS $2,200. Credit Inventory $2,200
- C.
  
  Debit cash $7,000. Credit Sales $7,000. Credit COGS $2,200. Debit Inventory $2,200
- D.
  
  Debit accounts receivable $7,000. Debit Sales $7,000. Debit COGS $2,200. Credit Inventory $2,200
18.

A company sells $7,000 inventory on account to a customer. The inventory has a cost of $2,200. What would be the correct journal entry to record the sale if the product will be delivered next week?
- A.
  
  Credit Unearned Revenue, Debit Sales Revenue, Debit COGS, Credit inventory
- B.
  
  Credit Unearned Revenue, Credit Sales Revenue, Debit COGS, Credit Inventory
- C.
  
  Credit Unearned Revenue, Debit Accounts Receivable
- D.
  
  Credit Unearned Revenue, Debit Sales Revenue
19.

What does the worksheet contain? (Check all applicable boxes)
- A.
  
  Income statement
- B.
  
  Balance Sheet
- C.
  
  Unadjusted trial balance
- D.
  
  Trial Balance
- E.
  
  Journal
- F.
  
  General Ledger
20.

What does the balance sheet contain? (Check all applicable boxes)
- A.
  
  Revenue
- B.
  
  Assets
- C.
  
  Expenses