Accounting Questions

1.Which of the following errors would be disclosed by preparation of a trial balance?

Select one:

a. The collection of an account receivable was recorded by a debit to the Land account rather than to the Cash account.

b. The collection of an account receivable for $319 was recorded by a $391 debit to Cash and a $391 credit to Accounts Receivable.

c. The collection of a $375 account receivable was not recorded at all.

d. The collection of a $225 account receivable was recorded by a $225 debit to Cash and a $255 debit to Accounts Receivable.

2.The income summary account has expenses of $65,000 and revenues of $55,000. The company had which of the following:

Select one:

a. Net income of $10,000

b. Net income of $120,000

c. Net loss of $10,000

d. Net loss of $120,000

3.Which of the followingis not characteristic of financial accounting?

Select one:

a. Information used in financial statements is prepared in conformity with generally accepted accounting principles.

b. The information is confidential and is intended for use only by company management.

c. The information is used in a wide variety of business decisions

d. The information is developed according to well defined standards.

4.If a company purchases equipment for $70,000 and pays in cash:

Select one:

a. Total assets will increase by $70,000.

b. Total assets will decrease by $70,000.

c. Total assets will remain the same.

d. The company's total owners'

5.It is the function of management accounting to perform the following activities, except:

Select one:

a. Preparing budgets

b. Cost accounting

c. Internal audits

d. Audited financial statements

6.The cost of delivering merchandise to the customer is:

Select one:

a. Part of cost of goods sold.

b. Used in the calculation of sales revenue.

c. An operating expense.

d. A reduction of gross profit.

7.The valuation of assets in the balance sheet is based primarily upon:

Select one:

a. What it would cost to replace the assets.

b. Cost, because cost is usually factual and verifiable.

c. Current fair market value as established by independent appraisers.

d. Cost, because in the event of liquidation, the assets would be sold at an amount equal to their original cost.

8.The bookkeeper prepared a check for $58 but accidentally recorded it as $85. When preparing the bank reconciliation, this should be corrected by:

Select one:

a. Depositing $27 into the bank account.

b. Withdrawing $27 from the bank account.

c. Adding $27 to the book balance.

d. Subtracting $27 from the book balance.

9. Efficient management of cash includes which of the following concepts?

Select one:

a. Pay each bill as soon as the invoice is received.

b. Reconcile cash accounts to bank statements only at the end of the year.

c. Prepare monthly cash budgets (forecasts) up to a year in advance.

d. Pay suppliers in cash out of cash sales receipts before depositing them in the bank.

10.Closing entries would be prepared:

Select one:

a. After financial statements are prepared

b. Before the post-closing trial balance

c. After an adjusted trial balance

d. Before adjusting entries