Scribd
Upload
5 views

Accounting_Practice_Exam

The document is a practice exam on accounting principles, featuring multiple-choice questions covering topics such as GAAP, the accounting process, and fundamental accounting concepts. It includes questions about the economic entity assumption, revenue recognition principle, and the purpose of adjusting entries. An answer key is provided at the end for reference.

Uploaded by

nhanvo.31241021299
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
5 views

Accounting_Practice_Exam

The document is a practice exam on accounting principles, featuring multiple-choice questions covering topics such as GAAP, the accounting process, and fundamental accounting concepts. It includes questions about the economic entity assumption, revenue recognition principle, and the purpose of adjusting entries. An answer key is provided at the end for reference.

Uploaded by

nhanvo.31241021299
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 7

Accounting Principles - Practice Exam

1. GAAP stands for:

a) Generally Accepted Auditing Procedures


b) Generally Accepted Accounting Principles
c) Generally Accepted Auditing Principles
d) Generally Accepted Accounting Procedures

2. The accounting process is correctly sequenced as:

Identification, communication, recording


b) Recording, communication, identification
c) Identification, recording, communication
d) Communication, recording, identification

3. The use of computers in recording business events:

 a) Has made recording efficient


 b) Doesn't follow manual principles
 c) Greatly impacted identification
 d) Economical only for large businesses

4. The process of recording transactions has become more efficient because:

 a) Fewer events can be quantified


 b) Computers are used
 c) More people hired
 d) Transactions recorded at year-end

5. The economic entity assumption requires that:

 a) Business activities reported to SEC


 b) Business separate from owner’s activities
 c) Proprietorships cannot be distinguished
 d) All entities combine financial statements

6. The private sector organization involved in developing accounting principles is:

 a) Financial Accounting Studies Board


 b) Financial Accounting Standards Board
 c) Feasible Accounting Standards Body
 d) Financial Auditors' Standards Body

7. Accountants refer to an economic event as a:

 a) Purchase
 b) Sale
 c) Transaction
 d) Change in ownership

8. Which of the following is not a characteristic of the cost principle?

 a) Reliability
 b) Subjectivity
 c) Objectivity
 d) Verifiability

9. The final step in solving an ethical dilemma is to:

 a) Identify and analyze elements


 b) Recognize ethical situation
 c) Identify alternatives and impact
 d) Recognize ethical issues

10. The basic accounting equation is:

 a) Assets = Equities
 b) Assets - Liabilities = Owner’s Equity
 c) Assets = Liabilities + Owner’s Equity
 d) All of these

11. The normal balance of any account is the:

 a) Left side
 b) Right side
 c) Side that increases
 d) Side that decreases

12. A debit is not the normal balance for which account?

 a) Owner’s Drawings
 b) Cash
 c) Accounts Receivable
 d) Service Revenue

13. Debits:

 a) Decrease both assets and liabilities


 b) Decrease liabilities and increase assets
 c) Increase both
 d) Increase liabilities and decrease assets

14. If a company overdraws its bank balance:


 a) Cash debit balance
 b) Cash credit balance
 c) Debit exceeds credits
 d) Undetectable

15. A debit to an asset account indicates:

 a) An error
 b) A liability credit
 c) A decrease
 d) An increase

16. Owner’s equity is best depicted as:

 a) Assets = Liabilities
 b) Liabilities + Assets
 c) Residual equity + Assets
 d) Assets - Liabilities

17. An account consists of:

 a) One part
 b) Two parts
 c) Three parts
 d) Four parts

18. The double-entry system requires:

 a) Two different accounts


 b) Two books
 c) Journal and ledger entry
 d) Revenue and expense entry

19. The left side of an account is called:

 a) The blank side


 b) A description
 c) The debit side
 d) The balance

20. A T-account is:

 a) A depiction of an account
 b) A trial balance alternative
 c) Used for dual balances
 d) A data organizing tool

21. The revenue recognition principle states revenue should be recorded:


 a) When cash received
 b) When earned
 c) Month-end
 d) When tax paid

22. The matching principle states expenses should be matched with:

 a) Customers
 b) Revenues
 c) Assets
 d) Creditors

23. The difference between asset cost and accumulated depreciation is:

 a) Cost - depreciation
 b) Depreciable cost ÷ rate
 c) Cost ÷ useful life
 d) Market value ÷ useful life

24. An adjusting entry:

 a) Affects two balance sheet accounts


 b) Two income statement accounts
 c) Balance sheet and income account
 d) Always compound entry

25. A post-closing trial balance is prepared:

 a) After closing entries


 b) Before closing entries
 c) During posting
 d) After adjustment

26. The time period assumption states:

 a) Transactions affect one period


 b) Estimates not for multiple periods
 c) Business life divided artificially
 d) Adjustments at business closure

27. If a company fails to adjust Prepaid Rent:

 a) Expenses overstated
 b) Net income understated
 c) Assets overstated
 d) No effect

28. Prepaid expenses are:


 a) Paid before use
 b) Paid after use
 c) Incurred but unpaid
 d) Already paid

29. Accrued revenues are:

 a) Earned not recorded


 b) Earned but liability recorded
 c) Liability before earned
 d) Earned and recorded

30. Depreciation is:

 a) Increasing asset value


 b) Allocating cost over time
 c) Writing down asset
 d) Valuing assets at market

31. The purpose of the post-closing trial balance is to:

 a) Prove that no mistakes were made


 b) Prove equality of balance sheet accounts carried forward
 c) Prove equality of income statement accounts carried forward
 d) List all the balance sheet accounts alphabetically

32. The final closing entry to be journalized is typically the entry that closes the:

 a) Revenue accounts
 b) Owner’s drawing account
 c) Owner’s capital account
 d) Expense accounts

33. A post-closing trial balance is prepared:

 a) After closing entries have been journalized and posted


 b) Before closing entries have been journalized and posted
 c) After closing entries have been journalized but before the entries are posted
 d) Before closing entries have been journalized but after the entries are posted

34. The net income (or loss) for the period is found by:

 a) Computing the difference between income statement columns


 b) Cannot be found on the worksheet
 c) Using adjusted trial balance totals
 d) Found in the general journal
35. Adjusting entries are prepared from:

 a) Source documents
 b) The adjustments columns of the worksheet
 c) The general ledger
 d) Last year's worksheet

36. A worksheet is a multiple column form that facilitates the:

 a) Identification of events
 b) Measurement process
 c) Preparation of financial statements
 d) Analysis process

37. Closing entries are necessary for:

 a) Permanent accounts only


 b) Temporary accounts only
 c) Both permanent and temporary accounts
 d) Permanent or real accounts only

38. A worksheet can be thought of as a(n):

Permanent accounting record


 b) Optional device used by accountants
c) Part of the general ledger
 d) Part of the journal

39. The information for preparing a trial balance on a worksheet is obtained from:

 a) Financial statements
 b) General ledger accounts
c) General journal entries
 d) Business documents

40. Preparing a worksheet involves:

a) Two steps
b) Three steps
c) Four steps
d) Five steps

Answer Key
1. b 2. c 3. a 4. b 5. b 6. b 7. c 8. b 9. c 10. c 11. c 12. d 13. b 14. b 15. d 16. d 17. c 18. a 19. c 20.
a 21. b 22. b 23. a 24. c 25. a 26. c 27. c 28. a 29. a 30. b 31. b 32. c 33. a 34. a 35. b 36. c 37. b
38. b 39. b 40. d

You might also like