Basic Accounting Multiple Choice Archives

Basic Accounting Multiple Choice

QUESTION 1

Which of the following is used to summarize and interpret all business transactions, resulting in useful financial data for the purposes of investment and business management?

		Source documents
		Accounting systems
		Chart of Accounts
		General Ledger

2.375 points

QUESTION 2

The overall process that leads to the capture and communication of essential accounting information is called the ____________.

		general journal.
		balance sheet.
		general ledger.
		accounting cycle.

2.375 points

QUESTION 3

Which type of account is carried forward into the new accounting period?

		Revenue
		Expense
		Equity
		Dividend

2.375 points

QUESTION 4

True or false. Tye is conducting the closing process on the year for his floristry business, Sunflowers. To transfer the balances of Sunflowers’ expense accounts, Tye would debit to expense accounts and credit to retained earnings account.

		FALSE
		TRUE

2.375 points

QUESTION 5

An accounting system is essential for recording the daily transactions of a business as part of the ____________.

		balance sheet.
		general journal.
		accounting cycle.
		general ledger.

2.375 points

QUESTION 6

Which of the following is used to review transactions to ensure they are posted to the correct accounts?

		General journal
		Journal account
		General ledger
		Account ledger

2.375 points

QUESTION 7

The capture and communication of essential accounting information occurs as a result of the __________ .

		balance sheet
		general journal
		general ledger
		accounting cycle

2.375 points

QUESTION 8

The primary accounts impacted by a journal entry that records newly completed work for which you were previously paid are __________ .

		unearned revenue and revenue.
		cash and accounts receivable.
		unearned revenue and cash.
		revenue and expense.

2.375 points

QUESTION 9

As you prepare payroll for the next pay period, the __________ are the primary accounts impacted.

		cash and salaries expense
		cash and salaries payable
		salaries payable and salaries expense
		salaries payable and accounts receivable

2.375 points

QUESTION 10

Which of the following is interest that has been earned and is yet to be paid to the holder of the note?

		Prepaid expense
		Accrued interest
		Periodicity assumption
		Systematic allocation

2.375 points

QUESTION 11

Which of the following is the process for recording the purchase of assets and then gradually transferring their cost to expense?

		Depreciation
		Matching principle
		Prepaid expenses
		Immediate recognition

2.375 points

QUESTION 12

Analysis of each __________ is important to maintaining the accountability over a businesss affairs.

		accounting cycle
		chart of accounts
		trial balance
		transaction

2.375 points

QUESTION 13

Which of the following is used for costs that are not seen as benefiting any future periods and are not linked to any revenue production?

		Periodicity assumption
		Immediate recognition
		Systematic allocation
		The matching principle

2.375 points

QUESTION 14

When land is recorded at its purchase price and that original price is maintained in the balance sheet, even though market value may increase over time, which of the following principles is at work?

		Historical cost principle
		Periodicity assumption
		Revenue recognition
		Depreciation

2.375 points

QUESTION 15

You have just purchased a new piece of office equipment for your business using cash. How would you record this entry?

		Debit assets and credit cash.
		Credit assets and debit cash.
		Debit expenses and credit cash.

2.375 points

QUESTION 16

Which of the following is an expense that is recorded before it is paid for?

		Prepaid expense
		Revenue
		Accrued expense
		Depreciation

2.375 points

QUESTION 17

___________ produce financial data for purposes of investment and business management based on analyzing and interpreting business transactions.

		Source documents
		An accounting system
		The chart of accounts
		The general ledger

2.375 points

QUESTION 18

The process of sorting data from the journal into the relevant general ledger accounts is called ___________.

		transaction analysis.
		period closing.
		adjusting entries.
		posting.

2.375 points

QUESTION 19

What represents the shareholders’ equity value of the company?

		Cash accounts
		Dividend accounts
		Net income
		Retained earnings balance

2.375 points

QUESTION 20

The retained earnings account balance __________ change throughout the accounting period.

		is likely to
		does not
		will

2.375 points

QUESTION 21

Which of the following can quickly tell a user the association between an account type and account entry?

		Credit
		Chart of accounts
		Accounting equation
		Debit

2.375 points

QUESTION 22

Retrievable documentation for every transaction and the basis for preparing financial statements are the two basic elements of a proper _____________.

		accounting system.
		database structure.
		accounting equation.
		contra account.

2.375 points

QUESTION 23

If you sell $250.00 worth of smoothies at your juice bar, you would post this amount to __________ in order to reflect the transaction.

		revenues
		expenses
		liabilities
		equity

2.375 points

QUESTION 24

The two basic elements of a proper __________ are retrievable documentation for every transaction and the basis for preparing financial statements.

		contra account
		database structure
		accounting equation
		accounting system

2.375 points

QUESTION 25

The account used to record revenue received for work that has not yet been completed is called:

		unearned revenue.
		revenue.
		accrued interest.
		prepaid expense.

2.375 points

QUESTION 26

If the accrued dollar amount for an account is different than the actuals usage for that account in a given period, you could align these amounts using a(n) ___________.

		financial statement.
		general journal.
		transaction analysis.
		adjusting entry.

2.375 points

QUESTION 27

Preparing the __________ is the next task after posting the adjusting entries.

		recorded transactions
		source documents
		adjusted trial balance
		general ledger

2.375 points

QUESTION 28

Which accounts do not appear in the post-closing trial balance?

		Accounts receivable
		Cash
		Expenses
		Retained earnings

2.375 points

QUESTION 29

__________ normally occurs at the time when services are rendered or when goods are sold and delivered to a customer.

		Depreciation
		Revenue recognition
		Periodicity assumption
		Historical cost principle

2.375 points

QUESTION 30

A __________ is simply the action of recording an increase to an asset, expense, or dividend account.

		accounting equation
		general ledger
		debit
		financial statement

2.375 points

QUESTION 31

Permanent accounts are also known as accounts.

		retained earnings
		real
		dividend
		liability

2.375 points

QUESTION 32

The process that involves reviewing transactions to determine the impacted account, and in what way it is impacted, is called ___________.

		transaction analysis.
		trial balance.
		adjusting entry.
		journal entry.

2.375 points

QUESTION 33

When asset, expense, and dividend accounts have more debits than credits, they are said to have a debit balance.

		normal
		credit
		general ledger
		contra account

2.375 points

QUESTION 34

Which of the following types of accounting looks at and recognizes the events that lead to transactions, not just the cash transactions?

		Accrual accounting
		Managerial accounting
		Tax accounting
		Cash basis accounting

2.375 points

QUESTION 35

Computerized accounting information systems are typically built around a ____________, which means that data is stored in an electronic array, including a variety of descriptive codes and indices.

		database structure
		source document
		general ledger
		general journal

2.375 points

QUESTION 36

What is Step 1 of the accounting cycle?

		examining source documents.
		determining and posting adjusting entries.
		recording transactions in the journal.
		constructing a trial balance.

2.375 points

QUESTION 37

_____________ is Step 4 of the accounting cycle.

		Constructing a trial balance
		Preparing financial statements
		Posting journal entries to the indicated ledger accounts
		Preparing an adjusted trial balance

2.375 points

QUESTION 38

Which of the following is the prevailing income measurement model that is primarily driven by transactions and events, and uses past data that is viewed as objective and verifiable?

		Revenue recognition
		Periodicity assumption
		Depreciation
		Historical cost principle

2.375 points

QUESTION 39

A __________ is a cost you pay in advance.

		accrued interest
		prepaid expense
		systematic allocation
		exchange transaction

2.375 points

QUESTION 40

Interest that has been earned and is yet to be paid to the holder of the note is called _____________.

		prepaid expense.
		accrued interest.
		systematic allocation.
		periodicity assumption.

2.375 points

Click Save and Submit to save and submit. Click Save All Answers to save all answers.

Part 2

QUESTION 1

On a notes payable, which term refers to the party to whom the payment will be made?

		Principal
		Customer
		Maker
		Payee

4.75 points

QUESTION 2

Mark has $20,000 to invest for years at an interest rate of 4%, compounded annually. After calculating the future value of this sum, what will Mark’s investment be at the end of the three year period?

		$20,880.08
		$23,200.00
		$22,497.28
		$22,400.00

4.75 points

QUESTION 3

When faced with uncollectible accounts receivable, accountants use the to record estimates for bad debt expenses in the same period as the related credit sales.

		allowance methods
		the direct write-off method

4.75 points

QUESTION 4

A customer for Dailey Enterprises has a $1,000 balance in his account. The Dailey Enterprises accountant makes the following journal entry to write off the $1,000. Which method did the accountant use?

10-1-15	Allowance for Uncollectible Accounts	1,000
	Accounts Receivable		1,000

		Reversal method
		Direct write-off method
		Allowance method
		Percentage of liabilities method

4.75 points

QUESTION 5

The term “cash” includes currency, coins, bank demand deposits, and __________ .

		undeposited checks
		travel expenses
		certificates of deposit
		IOUs

4.75 points

QUESTION 6

Maria purchases new living room furniture for $5,000 on credit at Wilson Furniture. Maria’s account is categorized by the store’s accountant as a note receivable, which means that Maria agrees to _______________.

		make monthly interest-free payments.
		repay the $5,000 within 30 days.
		repay the $5,000 plus interest.
		pay a service fee for the loan.

4.75 points

QUESTION 7

Mandy is conducting the monthly bank reconciliation for Closet World, Inc. The information provided to her is as follows: Bank’s ending balance = $11,130 Closet World’s ending balance = $11,700 Service charges = $80 Deposits in transit = $1,170 Interest paid = $30 Outstanding checks = $650 What is an example of something that Mandy will add to the company’s ending balance in the bank reconciliation process?

		Interest paid
		Deposits in transit
		Outstanding checks
		Service charges

4.75 points

QUESTION 8

The accountant for Elias Enterprises wants to ensure that bad debt expenses are recorded in the same period as related credit sales. Which of the following would fulfill the accountant’s objective?

		Contra asset method
		Direct write-off method
		Allowance method
		Net realizable value method

4.75 points

QUESTION 9

A customer purchases an $80,000 boat from Aqua Boating in July. The customer signs a contract with Aqua Boating and agrees to repay the $80,000 debt within 18 months plus 5% interest. Given this information, which of the following statements is true?

		The note will mature in July.
		The customer is the maker of the note.
		The customer has a nontrade receivable with Aqua Boating.
		Aqua Boating is the principal in the note.

4.75 points

QUESTION 10

To calculate present value of an annuity, what is the interest subtracted from?

		Future value
		Amount paid out each future period
		Present value

4.75 points

QUESTION 11

Mandy is conducting the monthly bank reconciliation for Closet World, Inc. The information provided to her is as follows:

Bank’s ending balance = $11,130

Closet World’s ending balance = $11,700

Service charges = $80

Deposits in transit = $1,170

Interest paid = $30

Outstanding checks = $650

What is an example of something that Mandy will add to the bank’s ending balance in the bank reconciliation process?

		Deposits in transit
		Service charges
		Outstanding checks
		Interest paid

4.75 points

QUESTION 12

The process of a bank reconciliation helps to identify errors, irregularities, and needed to be made to the __________ash accounts in the company records.

		deposits in transit
		additional statements
		adjustments

4.75 points

QUESTION 13

On a note, a payee is the ____________.

		party to whom payment will be made.
		stated value of the note.
		party promising to make payments.
		amount charged to use the money.

4.75 points

QUESTION 14

Marlena has decided to open an annuity. Because of the nature of her business’s peak earning times, her financial consultant suggests an annuity in which Marlena makes the payment at the beginning of each interest period. This is called an __________.

		annuity due
		ordinary annuity

4.75 points

QUESTION 15

Which term refers to a company’s uncollectible accounts receivable?

		Nontrade receivable
		Operating expense
		Bad debts expense
		Accounts payable

4.75 points

QUESTION 16

The amount that a customer owes a company for purchasing goods from the company on credit is categorized by the company as a(n)

		nontrade receivable.
		accounts receivable.
		accounts payable.
		operating expense.

4.75 points

QUESTION 17

Kip’s company has $25,000 of profits to invest. A financial advisor informs him that it can be increased to $30,000 after four years of investment. In this case, $25,000 is the __________ of the investment.

		future value
		present value

4.75 points

QUESTION 18

A customer of Dixon Enterprises has an uncollectible accounts receivable (A/R) balance of $1,000 on a purchase made in February. The Dixon accountant records the $1,000 as a bad debts expense in December. The accountant most likely used the

		income statement approach.
		direct write-off method.
		balance sheet approach.
		allowance method.

4.75 points

QUESTION 19

Aspen Appliances sells Kylie a refrigerator and an oven on October 1, 2015 for $6,000. Aspen issues a 6-month note to Kylie at an interest rate of 2%. Which of the following belongs in the blank of the following journal entry?

	———-	6,000
	Sales		6,000

		Notes Receivable
		Cash
		Interest Receivable
		Accounts Receivable

4.75 points

QUESTION 20

A cash planning system will all cash inflows and outflows for a business.

		generate and invest
		make equivalent
		anticipate and track

Posts

Basic Accounting Multiple Choice

Basic Accounting Multiple Choice

Disclaimer

We Accept

CONTACT INFO