Describes Financial Accounting Quiz Questions

30 Questions | Total Attempts: 62

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Accounting Quizzes & Trivia

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Questions and Answers
  • 1. 
    Which of the following best describes financial accounting?
    • A. 

      Artistic Presentation

    • B. 

      Information measurement/communication process

    • C. 

      Matematical procedure

    • D. 

      Behavioral psychology

  • 2. 
        1 / 1 point Which definition best describes financial accounting?
    • A. 

      Process of measuring income taxes owed to the government

    • B. 

      System of maintaining communication with a company's customers and suppliers

    • C. 

      Procedures designed to enhance the company's image to potential investors

    • D. 

      Measuring a company's business activities and communicating those measurements to external parties

  • 3. 
    Which of the following is a financing activity?
    • A. 

      Paying utilities for the month

    • B. 

      Issuing common stock to investors

    • C. 

      Selling equipment for cash

    • D. 

      Purchasing office supplies

  • 4. 
    Which of the following is an investing activity?
    • A. 

      Purchasing land

    • B. 

      Paying dividends to stockholders

    • C. 

      Repaying amounts borrowed from the bank

    • D. 

      Purchasing advertising on a local radio station

  • 5. 
    Which financial statement reports a company's assets and liabilities?
    • A. 

      Income statement

    • B. 

      Statement of cash flows

    • C. 

      Balance sheet

    • D. 

      Statement of stockholders' equity

  • 6. 
    Which financial statement shows a company's revenues and expenses?
    • A. 

      Income statement

    • B. 

      Statement of stockholders equity

    • C. 

      Balance sheet

    • D. 

      Statement of cash flows

  • 7. 
    Which of the following best describes an important function of financial accounting?
    • A. 

      To increase the number of customers for a company.

    • B. 

      To support the efficient distribution of society's resources.

    • C. 

      To provide managers with useful information related to human resources

    • D. 

      Support government initiatives through taxation of company profits.

  • 8. 
    Which body has the primary responsibility for the establishment of Generally Accepted Accounting Principles?
    • A. 

      American Institute of Certified Public Accountants (AICPA).

    • B. 

      International Accounting Standards Board (IASB).

    • C. 

      Securities and Exchange Commission (SEC).

    • D. 

      Financial Accounting Standards Board (FASB).

  • 9. 
    Traditional careers in public accounting include
    • A. 

      Auditors

    • B. 

      Tax preparers/planners

    • C. 

      Business consultants

    • D. 

      All of the above

  • 10. 
    A component of relevant accounting information includes:
    • A. 

      Faithful representation

    • B. 

      Materiality

    • C. 

      Predictive value

    • D. 

      Consistency

  • 11. 
        1 / 1 point Which of the following does not represent an external business transaction?
    • A. 

      Purchasing office supplies

    • B. 

      Paying employees salaries

    • C. 

      Expiration of an insurance policy over time

    • D. 

      Providing services to customers

  • 12. 
    Which step in the process of measuring external transactions involves assessing the equality of total debits and total credits?
    • A. 

      Use source documents to determine accounts affected by the transaction

    • B. 

      Preparing a trial balance

    • C. 

      Analyze the impact of the transaction on the accounting equation.

    • D. 

      Post the transaction to the T-account in the general ledger.

  • 13. 
    Which of the following transactions causes an increase in total liabilities?
    • A. 

      Pay maintenance expense for the current month.

    • B. 

      Provide services to customers on account.

    • C. 

      Pay dividends to stockholders.

    • D. 

      Purchase office supplies on account.

  • 14. 
    Which of the following transactions causes a decrease in stockholders' equity?
    • A. 

      Pay salaries expense for the current month.

    • B. 

      Repay amount borrowed from the bank.

    • C. 

      Provide services to customers for cash.

    • D. 

      Provide services to customers on account.

  • 15. 
        0 / 1 point Which of the following is possible for a particular business transaction?
    • A. 

      Increase assets; decrease liabilities.

    • B. 

      Decrease assets; increase stockholders' equity.

    • C. 

      Decrease assets; increase expenses.

    • D. 

      Decrease liabilities; increase expenses.

  • 16. 
        1 / 1 point A debit is used to decrease which of the following accounts?
    • A. 

      Salaries Expense

    • B. 

      Accounts Payable

    • C. 

      Dividends

    • D. 

      Supplies

  • 17. 
        1 / 1 point A credit is used to decrease which of the following accounts?
    • A. 

      Service Revenue

    • B. 

      Common stock

    • C. 

      Salaries Payable

    • D. 

      Cash

  • 18. 
    Purchasing office supplies on account for $100 is recorded as:
    • A. 

      Supplies 100 Accounts Payable 100

    • B. 

      Cash 100 Supplies 100

    • C. 

      Supplies 100 Cash 100

    • D. 

      Accounts Payable 100 Supplies 100

  • 19. 
    Transferring the debit and credit information from a journal to individual accounts in the general ledger is referred to as:
    • A. 

      Balancing

    • B. 

      Analyzing

    • C. 

      Posting

    • D. 

      Journalizing

  • 20. 
        1 / 1 point Which of the following is true about a trial balance?
    • A. 

      Only income statement accounts are shown

    • B. 

      Total debit amounts should always equal total credit amounts

    • C. 

      Only balance sheet accounts are shown

    • D. 

      The trial balance shows the change in all account balances over the accounting period

  • 21. 
    On September 9, Clearmore Services receives a request for services from a customer. The service is scheduled for September 15. On September 15, the service is provided and the customer pays one week later on September 22. According to the revenue recognition principle, on which date should Clearmore Services record service revenue?    
    • A. 

      September 9 (date of service request).

    • B. 

      September 15 (date of service).

    • C. 

      September 22 (date of cash receipt).

    • D. 

      Evenly over the three dates.

  • 22. 
    On March 4, Tonkawa Law asks Green Lawn Services for basic lawn maintenance totaling $200. Green Lawn provides maintenance on March 8, and Tonkawa pays for the lawn maintenance on March 12. According to the matching principle, on which date should Tonkawa record lawn maintenance expense?
    • A. 

      March 4 (date of request).

    • B. 

      March 8 (date of lawn maintenance service).

    • C. 

      March 12 (date of cash payment).

    • D. 

      Evenly over the three dates

  • 23. 
    Refer to the information in question 1. Using cash-basis accounting, on which date should Clearmore Services record service revenue?
    • A. 

      September 9 (date of service request).

    • B. 

      September 15 (date of service).

    • C. 

      September 22 (date of cash receipt).

    • D. 

      Evenly over the three dates

  • 24. 
    Refer to the information in self-study question 2. Using cash-basis accounting, on which date should Tonkawa record lawn maintenance expense?
    • A. 

      March 4 (date of request

    • B. 

      March 8 (date of lawn maintenance service

    • C. 

      March 12 (date of cash payment

    • D. 

      Evenly over the three dates.

  • 25. 
    Which of the following is a characteristic of adjusting entries
    • A. 

      Used in cash-basis accounting

    • B. 

      Recorded at the beginning of the accounting period

    • C. 

      Reduces the balances of revenue accounts to zero

    • D. 

      Allows for proper application of the revenue recognition principle (revenues) or the matching principle (expenses).

  • 26. 
    • A. 

      Rent Expense 2,000 Prepaid Rent 2,000

    • B. 

      Rent Expense10,000 Prepaid Rent10,000

    • C. 

      Rent Expense12,000 Prepaid rent 12,000

    • D. 

      No entry is required on December 31 because full cash payment was made on November 1.

  • 27. 
    The balance of retained earnings in the adjusted trial balance
    • A. 

      Equals the balance of retained earnings after closing entries

    • B. 

      Equals the balance of retained earnings at the beginning of the accounting period

    • C. 

      Is not shown

    • D. 

      Is the amount shown for retained earnings in the balance sheet

  • 28. 
    Which of the following describes the information reported in the income statement
    • A. 

      Net cash flows from operating, investing, and financing activities

    • B. 

      Changes in stockholders' equity through changes in common stock and retained earnings

    • C. 

      Net income for the period calculated as revenues minus expenses

    • D. 

      Equality of total assets with total liabilities plus stockholders' equity.

  • 29. 
    Which of the following describes the closing process
    • A. 

      Record external events for the period so that financial statements can be prepared

    • B. 

      Transfer the balances of temporary accounts (revenues, expenses, and dividends) to retained earnings.

    • C. 

      Record activities that have occurred but that have not been recorded by the end of the accounting period.

    • D. 

      Store all source documents used to record transactions throughout the period.

  • 30. 
    Which of the following accounts is listed in a post-closing trial balance?
    • A. 

      Salaries Payable

    • B. 

      Dividends

    • C. 

      Advertising expense

    • D. 

      Service revenue