Accounting Test

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Accounting Mastery Quiz

Test your knowledge of accounting principles and practices with this comprehensive 12-question quiz. Designed for both students and professionals, it covers essential topics that are critical for understanding the financial world.

Topics include:

Intangible assets
Rent payments
Depreciation
Gross profit calculation
Return on assets

12 Questions3 MinutesCreated by CalculatingWizard57

2. Beta Incorporated paid three months’ rent in advance on its new store. At the beginning of the next month, one month’s rent must be recorded as:

A. A prepaid asset.

A liability.

An expense.

Revenue.

3. Depreciation is an accounting procedure that:

A. Allocates the cost of an asset over its useful life.

B. Distributes the market value of an asset over its useful life.

C. Records the increase in value of real estate holdings.

D. Divides equipment cost over an accounting period.

5. Which of the following pieces of information do you need to know to calculate the return on assets for the year?

A. The total current assets and the net income at the end of the year.

B. The total assets and the net income at the end of the year.

C. The total assets and the net operating income at the end of the year.

D. The current assets and the net income at the end of the year.

7. What does it mean when payment terms are expressed as “1%/10 net 30”?

A. If payment is not made within 30 days, there will be a 1% penalty every 10 days until payment is satisfied.

B. Payment is due in 30 days, but if payment is made within 10 days, there will be a 1% discount.

C. Payment is due in 30 days with a 10 day grace period, after which a 1% penalty will be assessed.

D. None of the above.

8. The accounting department needs to pay a vendor via wire transfer. Which scenario demonstrates the best process from an internal control standpoint?

A. The accounts payable coordinator initiates and sends the wire with a simultaneous notification to the CFO who then performs a follow-up call to the vendor to confirm receipt of funds.

B. The accounts payable coordinator verifies payment instructions, initiates the wire, and the CFO approves it and performs a follow-up call with the vendor to confirm receipt of funds.

C. The accounts payable coordinator requests the payment, the CFO verifies payment instructions, initiates the wire, and the operations manager approves it. The CFO then performs a follow-up call to the vendor to confirm receipt of funds.

D. The accounts payable coordinator verifies the payment instructions, the CFO initiates and sends the wire and then performs a follow-up call to the vendor to confirm receipt of funds.

9. Which statement(s) is true.

A. An income statement represents a point in time.

B. A balance sheet represents a point in time.

C. A balance sheet reflects performance over a period of time.

D. Both (a) and (c).

11. Dual controls are an effective tool for what?

A. Ensuring effective communication and coordination between the business units.

B. Maximizing efficiency by reducing processing time.

C. Reducing the risk of fraud and errors.

D. Both (b) and (c).

12. Where would you expect to find cost of good sold expressed on the financial statements?

A. The consolidated cash flow statement.

B. The balance sheet and income statement.

C. The balance sheet

D. The income statement.

Accounting Test

Accounting Mastery Quiz

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