Accounting Skills Test Review

10

Vocabulary Checking

Financial Statement

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Accounting Equation Journals Misc.

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Final

Vocabulary - 10

• What is the length of time for which a business analyzes and reports financial data?

– term – trial balance– worksheet – fiscal period

Vocabulary - 20

• When financial records for a business and its owner’s personal belongings are kept separate, this is an application of which concept?

a) Business Entityb) Adequate Disclosurec) Consistent Reportingd) Going Concern

Vocabulary - 30

• Which accounting concept assumes that the business will continue to operate indefinitely?

a) Consistent Reportingb) Going Concernc) Adequate Disclosured) Business Entity

Vocabulary - 40

• The steps completed to record financial information for a fiscal period is known as the accounting ___________

a) systemb) cyclec) methodd) equation

Vocabulary - 50

• What is the term for recording business transactions in chronological order?

a) Balancing accountsb) Journalizingc) Postingd) Analyzing transactions

Vocabulary - 60

• Which of the following is used to make sound business decisions about the financial status of a company?

a) journalsb) Financial statementsc) Source documentsd) ledgers

Vocabulary - 70

• What is the term for the owner’s net worth in a business

a) Owner’s equityb) assetc) expensed) liability

Vocabulary - 80

• What is an economic event that affects at least two accounts?

a) Business transactionb) Drawing/withdrawalc) expensed) revenue

Vocabulary - 90

• What document shows a list of all accounts and their account numbers?

a) Chart of Accountsb) Balance sheetc) Income Statement d) Source document

Vocabulary - 100

• What accounts are closed at the end of a fiscal period?

a)liabilityb)permanentc)temporaryd)asset

Checking - 10

• What is a check that has been written but not presented to a bank for payment?

a) Deposited checkb) Cashed checkc) Outstanding checkd) Voided check

Checking - 20

• What are deposits made by a depositor but not shown on a bank statement?

a) Canceled checksb) Outstanding checksc) Outstanding depositsd) Post-dated depostis

Checking - 30

• How does a NSF/dishonored check affect the checkbook balance?

a) Decreases cashb) Increases cashc) Decreases petty cashd) Decreases cash

Checking - 40

What is a check returned by the bank because there are not enough funds in the drawer’s checking account?

a) Canceled checkb) Outstanding checkc) Dishonored/NSF checkd) Voided check

Checking - 50

When a check is endorsed with only the payee’s signature, this is known as a

a) Special Endorsementb) Blank Endorsementc) Owner’s Endorsementd) Restrictive Endorsement

Checking - 60

When a check endorsement includes the words “pay to the order of” and the name of a new payee, this is known as a

a) Special Endorsementb) Blank Endorsementc) Owner’s Endorsementd) Restrictive Endorsement

Checking - 70

What is the term for bringing a bank statement and a checkbook into agreement?

a) Posting a bank statementb) Reconciling a bank statementc) Journalizing a bank statementd) Preparing a bank statement

Checking - 80

What type of check endorsement includes the words “For Deposit Only”?

a) Restrictive endorsementb) Endorsement in fullc) Blank endorsementd) Special endorsement

Checking - 90

What is the entry to record a bank service charge?

a) Debit Dishonored Check Charge and credit Cash

b) Debit Misc. Expense and credit Petty Cash 

c) Debit Cash and credit Misc. Expensed) Debit Misc. Expense and credit Cash

Checking - 100The following information is obtained from the bank statement and from the records of the business. What is the adjusted balance after the bank reconciliation is prepared?

a) $2,490b) $2,700c) $2,110d) $2,300

Bank statement balance: $2,500Bank Service Charge: $10

Outstanding deposits: $750Outstanding checks: $950Checkbook balance: $2310

Financial Statements - 10

Which date range represents a fiscal year?

a) August 1, 2011 to July 31, 2012b) October 1, 2011 to December 21, 2011c) November 1, 2011 to January 21, 2012d) January 1, 2011 to June 30, 2011

Financial Statements - 20

What form is used to prove equality of debits and credits after posting?

a) Chart of Accountsb) Income Statementc) Journald) Trial Balance

Financial Statements - 30

What is a financial statement that reports assets, liabilities, and capital on a specific date?

a) General Ledgerb) Cash Flow Statementc) Balance Sheetd) Income Statement

Financial Statements - 40

How is the date written on the August income statement?

a) For Month Ended August 21, 2013b) August 31, 2013c) 8/31/2013d) August 2013

Financial Statements - 50

All asset account balances are shown on which financial statement?

a) Income Statementb) Statement of Owner’s Equityc) Balance Sheetd) Distribution of Net Income

Financial Statements - 60

When preparing a trial balance, where are all account balances obtained?

a) Balance Sheetb) General Journalc) Income Statementd) General Ledger

Financial Statements - 70

How is net income calculated?a) Assets minus liabilitiesb) Revenue minus expensesc) Expenses plus revenue minus drawingd) Assets minus expenses

Financial Statements - 80

Which of the following groups of accounts are included in a post-closing trial balance?

– Assets, liabilities, expenses– Assets, revenue, capital– Assets, liabilities, capital– Revenue, expenses, drawing/withdraw

als

Financial Statements - 90

What are the three sections of an Income Statement?

a) Revenue, liabilities, net income/lossb) Assets, liabilities, owner’s equityc) Revenue, expenses, owner’s equityd) Revenue, assets, expenses

Financial Statements - 100

If revenue/sales is $1,000, advertising expense is $300, miscellaneous expense is $100, and rent expense is $800, what is the result?

a) Net loss of $200b) Net income of $200c) Net loss of $1,200d) Net income of $1,200

Accounting Equation - 10

The accounting equation is:a) Assets + liabilities = owner’s equityb) Assets = liabilities + owner’s equityc) Revenue – Expenses = Net Incomed) Assets = liabilities – owner’s equity

Accounting Equation - 20

How is the accounting equation affected when a business pays cash for rent?

a) Liabilities increase and owner’s equity decreases

b) Assets decrease and expenses increase

c) Assets increase and expenses decrease

d) Assets decrease and owner’s equity increases

Accounting Equation - 30

What account classification is Accounts Receivable?

a) expenseb) revenuec) assetd) Owner’s equity

Accounting Equation - 40

What is the term for an amount owed by a business?

a) expenseb) liabilityc) Assetd) Owner’s equity

Accounting Equation - 50

What is one way owner’s equity is increased?

a) Net incomeb) Owner’s withdrawal of merchandisec) Net lossd) Owner’s withdrawal of cash

Accounting Equation - 60

How are assets affected when the owner invests $1,000 in the business?

a) Decreased by $2,000b) Decreased by $1,000c) Increased by $1,000d) Increased by $2,000

Accounting Equation - 70

Which is the following accounts is a liability account?

a) Cashb) Accounts Payablec) Accounts Receivabled) Capital

Accounting Equation - 80

How is the accounting equation affected when the Garcia Company buys supplies for cash?

a) One asset increases and owner’s equity decreases

b) One asset increases and one asset decreases

c) One asset increases and one expense increases

d) One asset decreases and owner’s equity decreases

Accounting Equation - 90

How is the accounting equation affected when cash is paid for equipment?

a) An asset and a liability are changedb) Two assets are changedc) An asset and capital are changedd) Two liabilities are changed

Accounting Equation - 100

What is the balance of owner’s equity if assets equal $32,750 and liabilities equal $14,800?

a) $17,950b) $17,150c) $47,550d) $47,250

Journals - 10

Which statement is true regarding the accuracy of a journal?

a) Debits should equal creditsb) Debits should be greater than creditsc) Credits should be greater than debitsd) Debits mean decrease and credits

mean increase

Journals - 20

If an error in journalizing is discovered after posting, what should be done?

a) Erase the journal entryb) Write the correction above the errorc) Journalize the correcting entryd) Draw a line through the journal entry

Journals - 30

What is the journal entry when a check is received from a customer to apply on account?

a) Debit Cash and credit Accounts Payable

b) Debit Cash and credit Accounts Receivable

c) Debit Accounts Receivable and credit Cash

d) Debit Accounts Payable and credit Cash

Journals - 40

What is the entry to establish a petty cash fund?

a) Debit Misc. Expense and credit Cashb) Debit Cash and credit Petty Cashc) Debit Petty Cash and credit Cashd) Debit Petty Cash and credit Misc. Expe

nse

Journals - 50

Where are individual account balance located?

a) Journal Entriesb) Income Statementc) General Journald) General Ledger

Journals - 60

What is the next step in the accounting cycle after analyzing a source document?

a) Preparing financial statementsb) Posting to the ledgerc) Recording transactions in a journald) Preparing the trial balance

Journals - 70

Which transaction closes expense accounts?

a) Debit Expenses and credit Capitalb) Debit Expenses and credit Income Sum

maryc) Debit Capital and credit Expensesd) Debit Income Summary and credit exp

enses

Journals - 80

After the closing entries, which account would still have a balance?

a) Revenue/Salesb) Drawing/Withdrawalsc) Capitald) Income Summary

Journals - 90

What is the journal entry when a check is written to make payment on account?

a) Debit Cash and credit Accounts Receivable

b) Debit Accounts Receivable and credit Cash 

c) Debit Accounts Payable and credit Cash 

d) Debit Cash and credit Accounts Payable

Journals - 100

What transaction closes the income summary account with a net loss?

a) Debit Income Summary and credit Revenue/Sales

b) Debit Capital and credit Revenue/Salesc) Debit Capital and credit Income Summ

aryd) Debit Income Summary and credit Capi

tal

Misc. - 10

What is the term for a business owned by one person?

a) proprietorshipb) Partnershipc) cooperatived) corporation

Misc. - 20

What type of business charges a fee for work performed?

a) Merchandising businessb) Retail businessc) Manufacturing businessd) Service business

Misc. - 30

How is the capital account affected when the owner invests cash in a business?

a) Increased by a creditb) Increased by a debitc) Decreased by a creditd) Decreased by a debit

Misc. - 40

How is the accounting equation affected if a business receives $5,000 from revenue/sales?

a) Decrease assets and decrease revenueb) Increase liabilities and decrease owner’

s equity 

c) Increase asssets and decrease liabilities 

d) Increase assets and increase revenue

Misc. - 50

How are accounts affected when the owner withdraws cash for personal use?

a) Assets decrease and drawing/withdrawals increase

b) Liabilities increase and assets decreasec) Assets decrease and drawing/withdraw

als decreased) Liabilities decrease and assets decreas

e

Misc. - 60

What is the process of transferring amounts for a journal to a ledger?

a) Balancingb) Postingc) Reconcilingd) Journalizing

Misc. - 70

At the beginning of a new fiscal period, what is the balance of accounts that have been closed?

a) creditb) zeroc) debitd) unchanged

Misc. - 80

What account is debited when a company pays for a radio commercial?

a) Supplies Expenseb) Miscellaneous Expensec) Cashd) Advertising Expense

Misc. - 90Beginning capital is $30,000, revenue/sales is $4000, expenses are $1,500, and the owner’s drawing/withdrawals account has a $500 balance. What is the updated capital account balance?

A.$25,000B.$32,000C.$28,000D.$34,000

Misc. - 100Accounts receivable had a balance of $1,500 on May 31. There were debit postings of $900 and credit postings of $700 during June. What was the accounts receivable balance on June 30?

A. $1,700 creditB. $1,300 debitC. $1,300 creditD. $1,700 debit

Final

• To prepare for the competency test, which option is your best bet for a great score?

a) Bribe your teacherb) Sleep during the testc) Stay up lated) Study hard

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