1st Accounting 1 FBLA Practice Quiz (100 Multiple Choice Q&A)

1. Which one of the following is a column title in the Cash Receipts Journal for a total amount that is debited?

A. Sales Revenue

B. Sales Discounts

C. Accounts Recievable

D. Other Accounts

B. Sales Discounts

2. Which one of the following is a column title in the Cash Payments Journal for a total amount that is debited?

A. Other Accounts

B. Cash

C. Purchases

D. Accounts Payable

D. Accounts Payable

3. Which one of the following special journals has only two columns for recording dollar amounts?

A. Purchases Journal

B. Sales Journal

C. Cash Payments Journal

D. Cash Receipts Journal

B. Sales Journal

4. Which journal has a column for the invoice numbers?

A. Sales Journal

B. Cash Payments Journal

C. Purchases Journal

D. Cash Receipts Journal

A. Sales Journal

5. Which one of the special journals has only one column for recording dollar amounts?

A. Cash Payments Journal

B. Cash Receipts Journal

C. Purchases Journal

D. Sales Journal

C. Purchases Journal

6. Shaw Industries purchased a delivery vehicle in exchange for a Note Payable. In which journal is the transaction recorded?

A. Purchases Journal

B. General Journal

C. Cash Payments Journal

D. Cash Receipts Journal

B. General Journal

7. DC Enterprises returned $567 worth of merchandise purchased one week before and received credit on their account? In which journal is the transaction recorded?

A. Cash Receipts Journal

B. General Journal

C. Cash Payments Journal

D. Purchases Journal

B. General Journal

8. Which one of the following is not posted to the Cash Receipts Journal?

A. Checks received in payment of a bill

B. Cash received for a cash sale

C. Checks received in payment of services rendered before it is billed

D. Services received in payment of a bill

D. Services received in payment of a bill

9. Which one of the following is posted to the Cash Payments Journal?

A. Cash paid out of petty cash for postage

B. Checks written

C. Receipt from an employee for proof of business expense

D. Checks received

B. Checks written

Shaw Industries is a retailer of office furniture. On May 8, 2012 Cullen Co. purchased $1656 in merchandise and charged it. In which journal is the transaction recorded?

A. Sales Journal

B. Purchases Journal Journal

C. General Journal

D. Cash Receipts Journal

A. Sales Journal

11. Shaw Industries sold adding machine tape in exchange for a check. In which journal is the transaction recorded?

A. Purchases Journal

B. Sales Journal

C. Cash Receipts Journal

D. Cash Payments Journal

C. Cash Receipts Journal

12. Shaw Industries accepted Cody Reese's credit card in payment of today's purchase of one adding machine. In which journal was is the transaction recorded?

A. General Journal

B. Cash Receipts Journal

C. Purchases Journal

D. Sales Journal

B. Cash Receipts Journal

13. What is the term for transferring the amounts from the special journals to the General Ledger?

A. Posting

B. Recording

C. Transferring

D. Journalizing

A. Posting

14. How often are postings made to the subsidiary ledgers?

A. Daily

B. Monthly

C. Weekly

D. Biweekly

A. Daily

15. Which of the following is posted to the Purchases Journal?

A. Merchandise purchased on account

B. Equipment purchased with a Note Payment

C. Snacks for the office paid out of petty cash

D. Merchandise purchased by a customer on account

A. Merchandise purchased on account

16. What type of entry will always affect one Income Statement account and one Balance Sheet account?

A. Collection of bill

B. Closing Entry

C. Adjusting Entry

D. Payment of a bill

C. Adjusting Entry

17. What is totaling the columns of a journal called?

A. Verifying

B. Proving

C. Footing

D. Reference

C. Footing

18. Which of the following accounts is not closed at the end of an accounting period?

A. Utility Expense

B. Unearned Revenue

C. Drawing

D. Service Revenue

B. Unearned Revenue

19. Revenues that are earned but not yet recorded are:

A. Those for which the company is paid for in advance of providing the service

B. Accruals

C. Those in Accounts Payable

D. Deferrals

B. Accruals

20. What is the term for listing assets in the order in which they are expected to be converted into cash?

A. Liquidity

B. Order Created

C. Magnitude

D. Importance

A. Liquidity

21. Which one of the following best describes what goes into Accounts Payable?

A. Purchases on Credit from suppliers

B. Sales taxes owed to the State Government

C. Wages owed to the Employees

D. Accounts received for services not yet published

A. Purchases on Credit from suppliers

22. Which one of the following is not an asset account?

A. Prepaid Insurance

B. Equipment

C. Cash

D. Supplies Expense

D. Supplies Expense

23. Which one of the following is used to record cash received that the business does not own?

A. Accounts Receivable

B. Prepaid Expenses

C. Unearned Revenue

D. Supplies Expense

C. Unearned Revenue

24. Which one of the following is not a capital account?

A. Service Revenue

B. Unearned Revenue

C. Rent Expense

D. Draw

B. Unearned Revenue

25. Why are there gaps in the numbering system of the chart of accounts?

A. Numbering systems are the same in all companies, but not needed by smaller companies

B. To permit insertion of new accounts as needed by the business

C. To allow moving accounts from one area to another

D. Accounts not utilized over time are deleted

B. To permit insertion of new accounts as needed by the business

26. How are obligations that a company expects to pay after one year classified?

A. Long-Term Liabilities

B. Current Liabilities

C. Deferred Expenses

D. Accrued Expenses

A. Long-Term Liabilities

27. Which category of accounts is assigned the highest numbers in the chart of accounts?

A. Assets

B. Expenses

C. Revenues

D. Liabilities

B. Expenses

28. Which one of the following is an intangible assets?

A. Prepaid Insurance

B. Supplies

C. Copyrights

D. License fees

C. Copyrights

29. Which one of the following is a current asset?

A. Inventory

B. Patents

C. Goodwill

D. Equipment

A. Inventory

30. How are assets that a company expects to convert to cash or use up in approximately one year classified?

A. Depreciable Assets

B. Receivables

C. Current Assets

D. Payables

C. Current Assets

31. Which one of the following is not classified as a current asset?

A. Merchandise Inventory

B. Supplies on hand

C. Machinery

D. Investments purchased to be resold when price increases

C. Machinery

32. Which one of the following is considered a fixed asset?

A. Cash

B. Intangibles

C. Equipment

D. Supplies

C. Equipment

33. Which one of following is a Long-Term Liability?

A. Income Taxes Payable

B. Notes Payable

C. Current Maturities of long-term obligations

D. Interest Payable

B. Notes Payable

34. What is the first step in the accounting cycle?

A. Posting the information to the General Ledger

B. Entering the information in the journal to the accounts impacted

C. Looking at each transaction to determine its effect(s) on the business accounts

D. Determining what accounts to debit or credit

C. Looking at each transaction to determine its effect(s) on the business accounts

35. When is the trial balance prepared?

A. Prior to posting the journal entries to the General Ledger

B. Prior to posting the adjusting entries

C. After journalizing the deferral and accruals

D. After posting the closing entries

B. Prior to posting the adjusting entries

36. Which one of the following the correct accounting equation?

A. Assets = Liabilities - Owners Equity

B. Assets = Liabilities + Owners Equity

C. Assets + Owners Equity = Liabilities

D. Assets + Liabilities = Owners Equity

B. Assets = Liabilities + Owners Equity

37. The beginning of the year balances for Lang Enterprises were as follows: Assets $130,510; Liabilities $36,490. What was the Equity balance?

A. $166,000

B. $94,020

C. $95,020

D. $167,000

B. $94,020

38. Which one of the following is not a source of information for accountants?

A. IASB

B. SEC

C. FASB

D. IRS

D. IRS

39. What does GAAP stand for?

A. Generally Accepted Account Principles

B. Generally Applied Accounting Principles

C. Generally Applied Accounting Procedures

D. Generally Accepted accounting procedures

A. Generally Accepted Account Principles

40. Due to the facts that many businesses today are global rather than only national or regional, many countries have already or are considering adopting uniform accounting standards internationally. What is the acronym for this?

A. IFRS

B. IAASB

C. IGAAP

D. IASB

A. IFRS

41. Which financial statement is the only one that does not depict the activity of a business for a period of time?

A. Income Statement

B. Balance Sheet

C. Owners Equity Statement

D. Statement of Cash Flows

B. Balance Sheet

42. Which one of the following is not provided by the Statement of Cash Flow?

A. The change in the company cash balance

B. The source of cash during the period

C. The uses of cash during the period

D. The company's ability to generate cash

D. The company's ability to generate cash

43. The monetary assumption requires that transactions be recorded in money terms. In order to do this, companies must quantify all economic events except which one of the following?

A. Revenue Received

B. Note balances

C. Property resale value

D. Equipment cost

C. Property resale value

44. What are the investments that the owner(s) put into a buisness called?

A. Capital

B. Purchases

C. Long-term Investments

D. Assets invested

A. Capital

45. For every transaction recorded, debits must equal credits. What is this the basis for?

A. The Double Entry System

B. GAAP

C. Preparing The Income Statement

D. Posting To The General Ledger

A. The Double Entry System

46. What is the purpose of the trial balance?

A. To determine that all business transactions have been recorded

B. To determine that all business transactions have been posted

C. To determine that the total debits equals the total credits after posting

D. To determine whether the postings have been done correctly

C. To determine that the total debits equals the total credits after posting

47. Which one of the following is listed in the income statement under GAAP?

A. Investments made by the owner

B. Revenue earned during the report period

C. Withdrawals by the owner

D. Revenues paid in advance by customers for services to be provided

B. Revenue earned during the report period

48. Which one of the following is not an alternative term for Income Statement?

A. Profit and Loss Statement

B. Statement of Financial Condition

C. Statement of Operations

D. Earning Statement

B. Statement of Financial Condition

49. Why is the Income Statement the first statement to be prepared?

A. The net income or net loss is the first information the interested parties look at.

B. The net income or net loss is necessary to show sources and use cash for the period

C. The net income or net loss is needed to prepare the Owner's equity statement

D. The net income or net loss is necessary to have a current total revenue and a total expense amount to report on the Balance Sheet

C. The net income or net loss is needed to prepare the Owner's equity statement

50. The Income Statement for Shane Systems shows $34,378 in service revenues. $4,562 in miscellaneous sales revenue, $1000 in rent revenue, and 39,789 in expenses. How is the net amount shown on the Income Statement?

A. $849 net loss

B. $151 net loss

C. $151 net income

D. $5,411 net loss

C. $151 net income

51. The revenue and expense account balances are not carried forward to the next accounting period. This is done so that the interested parties can determine what?

A. Whether the business has income over its life

B. Whether the business is a sound investment

C. Whether the business is currently generating income

D. Whether the business is stable long term

C. Whether the business is currently generating income

Terri's Bookkeeping Services had the following activities during this month:

Consulting Service Revenue $1,500

Data Entry Service Revenue $650

Report Generation Revenue $360

Rent Expense $450

Payroll Expense $2800

Bookkeeping Services Revenue $1790

Miscellaneous Revenue $325

Utilities Expense $145

Supplies Expense $85

Delivery Expense $40

Deposit for services to be done $450

Purchase of office furniture $700

52. What is the amount that Terri's Capital account changes as a result of the above activity?

A. Increase of $1,605

B. Increase of $855

C. Increase of $1,105

D. Increase of $405

C. Increase of $1,105

53. What is the process of enter the account information from the journal(s) to the general ledger called?

A. Transferring

B. Posting

C. Recording

D. Journalizing

B. Posting

54. Which one of following is a subsidiary ledger?

A. Purchase Journal

B. Cash Payments Journal

C. Accounts Receivable Ledger

D. General Ledger

C. Accounts Receivable Ledger

55. Why are the customer's charges and payments put in a subsidiary ledger?

A. This is done so that the amount owed by individual customers is readily available.

B. This is done so that the current customers can be identified.

C. This is done so that there is a listing of the customers a company has

D. This is done so that the control can be verified periodically.

A. This is done so that the amount owed by individual customers is readily available.

56. Which one of the following is a control account?

A. Accounts Payable

B. Owner's Drawing

C. Cash

D. Accumulated depreciation

A. Accounts Payable

57. What account used during the posting of clothes entries never appears on a financial statement?

A. Drawing

B. Capital

C. Income Summary

D. Service Revenue

C. Income Summary

58. What is the total of the information in the subsidiary ledgers compared to?

A. General Ledger

B. Control Accounts

C. General Journal

D. Special Journal

B. Control Accounts

59. An account that appears on the balance sheet is:

A. Net Sales

B. Advertising Expense

C. Interest Income

D. Merchandise Inventory

D. Merchandise Inventory

60. Which one of the following is an asset account?

A. Interest Expense

B. Rent Expense

C. Prepaid Expense

D. Insurance Expense

C. Prepaid Expense

61. Which one of the following is a liability account?

A. Service Revenue

B. Interest Revenue

C. Unearned Revenue

D. Rent Revenue

C. Unearned Revenue

62. Which one of the following is the correct order for listing the following account categories on the Balance Sheet?

A. Notes Payable, Account Payable, Wages Payable

B. Account Payable, Wages Payable, Notes Payable

C. Notes Payable, Wages Payable, Account Payable

D. Accounts Payable, Notes Payable, Wages Payable

B. Account Payable, Wages Payable, Notes Payable

63. What is one of uses of the Balance Sheet information?

A. It tells the creditor whether the entity is capable of meeting its current obligations

B. It tells the interested parties the entity's percentage of total assets provided by creditors.

C. It tells the outside parties the amount owed it by customers.

D. It tells the investor if the entity will be a strong source of future

D. It tells the investor if the entity will be a strong source of future

64. What is working capital?

A. It is an absolute dollar amount calculated from the information provided in the current sections of the Balance Sheet

B. It is the amount of cash in the general checking account at any given time

C. It is the ratio of current assets divided by current liabilities

D. It is amount of cash available for purchase of equipment

A. It is an absolute dollar amount calculated from the information provided in the current sections of the Balance Sheet

65. Which one of the following is a correct statement about the adjustments columns of the worksheet?

A. They are entered after the entries are made in the proper journal(s)

B. They included correcting entries for errors found

C. The added account titles can only be Income Statement accounts.

D. The items entered are either deferrals or accurals.

D. The items entered are either deferrals or accurals.

66. The debit column of the Income Statement columns on the worksheet totals $32,567 more than the credit column. What does this indicate?

A. There is an error

B. The entity incurred a loss of $32,567

C. All the entities have not been calculated across correctly.

D. The entity earned income of $32,567

B. The entity incurred a loss of $32,567

67. Which one of the following is not correct concerning the worksheet?

A. The financial statement information is available, but not finalized for the Balance Sheet.

B. The information for the Trial Balance columns comes directly from the General Ledger

C. The debits and credits of each pair columns should always equal each other when totaled.

D. The adjusted Trial Balance columns are the source for financial statements.

C. The debits and credits of each pair columns should always equal each other when totaled.

68. Which account appears in the Balance Sheet columns of the worksheet that does not appear on the statement itself?

A. Net Income

B. Drawing

C. Capital

D. Current Investment

B. Drawing

69. Which one of the following statements about the Worksheet is correct?

A. The Balance Sheet numbers in the columns of the worksheet are the numbers as they appear on the formal financial statement itself

B. The worksheet does not use dollar signs in the columns

C. The Post Closing Trial Balance is necessary in order to complete the statement columns

D. The adjustments columns of the worksheet are completed after the adjustments are journalized

B. The worksheet does not use dollar signs in the columns

70. Where are the numbers in the Trial Balance columns of the worksheet taken from?

A. Subsidiary Ledgers

B. Special Journals

C. General Ledgers

D. General Journal

C. General Ledgers

71. A mistake was made when completing check # 564 to DC Enterprise for 34.00 due. How should this be entered in the Check Register?

A. #564 DC Enterprises 00.00

B. No entry should be made.

C. #564 DC Enterprises 34.00

D. #564 VOID 00.00

D. #564 VOID 00.00

72. Which one of the following is an example of a debit memorandum that may appear on a bank statement?

A. Check written by the entity's customer that was not covered by their bank

B. Note proceeds collected by the bank

C. Bank Service charges

D. Error found by the bank

C. Bank Service charges

73. Morris Enterprises recorded a deposit of payments from customers on account in the amount of $6,798.00 as $6,978.00 in Cash Receipts Journal. What is the journal entry to correct this error?

A. Debit Sales $180; Credit Cash $1,805

B. Debit Cash $180; Credit Sales $180

C. Debit Cash $180; Credit Accounting Receivable

D. Debit Accounts Receivable $180; Credit Cash $180

D. Debit Accounts Receivable $180; Credit Cash $180

The Following information is used to prepare the bank reconciliation.

Balance on the bank statement provided by the bank: $58,545

Balance per the company books: $61,203

Deposits in Transit: $3,782

Outstanding Checks $1,915

Bank Service Checks $28

NSF check #346 received from Ajax Co. $763

74. What is the bank adjusted balance?

A. $60,412

B. $61,374

C. $56,678

D. $60,649

A. $60,412

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To long for me type

76. Which one of the following is not one of the uses of the Payroll Register?

A. It provides a cumulative record of each employee's earnings and total company payroll.

B. It provides a cumulative record of employer payroll taxes paid.

C. It provides the information needed at yearend for federal and state fillings.

D. It helps determine when an employee has earned the maximum earnings subject to FICA taxes.

B. It provides a cumulative record of employer payroll taxes paid.

77. There is one supervisor at the warehouse of Morris Supply. This individual has the responsibility of turning in the time cards (a time clock is utilized) each payroll period and distributing payroll checks to the workers. Which one of the following is an additional control that should be in place?

A. The supervisor should verify hours

B. The employees should personally pick up their checks.

C. An employee from the main office should physically observe employees punching in and out of work.

D. Someone else should turn in the time cards.

B. The employees should personally pick up their checks.

78. Which one of the following is not an example of "other deductions?"

A. Contributions

B. Union dues

C. Vacation pay deduction

D. Pension contribution

C. Vacation pay deduction

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To long for me to type

80. Which form informs the employee of total yearly wages and withholdings?

A. W-4

B. I-9

C. Form 1099

D. W-2

D. W-2

81. Which one of the following is a characteristic of general partnerships?

A. Transferable ownership rights

B. Unlimited life

C. Government regulation

D. Unlimited liability

D. Unlimited liability

82. Which one of the following characteristics do partnerships and sole proprietorship have in common?

A. Additional taxes

B. Unlimited liability

C. Unlimited life

D. Mutual Agency

B. Unlimited liability

83. Which one of the following terms is also referred to as a privately held corporation?

A. For-Profit Corporation

B. Association

C. Limited Liability Corporation

D. Closely Held Corporation

D. Closely Held Corporation

84. Which one of the following is a disadvantage if a corporation?

A. Additional taxes

B. Separate Legal Existence

C. Continuous Life

D. Limited Liability

A. Additional taxes

85. Corporations cannot deduct dividends paid to shareholders as an expense on their income statement. Stakeholders report dividends as income and pay taxes on them. What is this called?

A. Pass through income

B. Capital Income

C. Accrual Accounting

D. Double taxation

D. Double taxation

86. The appropriate depreciation method selected by management should be for which of the following reasons?

A. The method that best measures the use of an asset as it provides revenue for the entity

B. The method that is the most convenient to calculate

C. The method that provides the best income tax result for the entity

D. The method that is required by the government for filing taxes

A. The method that best measures the use of an asset as it provides revenue for the entity

87. Which one of the following depreciation methods is an accelerated- depreciation method?

A. Amortizing method

B. Declining balance method

C. Straight-line method

D. Units-of-activity

B. Declining balance method

88. DC Corporation purchased a delivery truck for $46,400 on the first day of the year. It has determined that the life of the truck will be four years and its salvage value will be $400. If the DC uses straight-line depreciation, what is the second year depreciation expense?

A. $11,600

B. $11,700

C. $11,500

D. $11,000

C. $11,500

89. DC Corporation purchased a delivery truck for $48,600 on the first day of the year. It has determined that the life of the truck will be four years and its salvage value will be $600. The truck is expected to be driven a total of 120,000 miles over its useful life. If the DC uses units of activity depreciation, what is the second year's depreciation expense if the truck is driven 28,223 miles the in year one and 30,561 in year two?

A. $12,224.40

B. $11,289.20

C. $12,377.205

D. $11,430.32

A. $12,224.40

90. ASB Co. purchased equipment for $123,650 on July 1, 201X. The first year's (partial) depreciation was correctly calculated to be $8,050. ASB borrowed $100,000 from their bank to buy this equipment and paid $23,650 in cash. The interest rate is 6%. What is the balance in the Equipment account at the end of the year?

A. $123,650

B. $117,600

C. $100,000

D. $120,650

A. $123,650

91. The heading of the spreadsheet used by the company takes three lines. The numeric information begins on the next line (D4). What is the D16 cell input information for a formula to total the numbers in the D column above the line?

A. =(D4+D5+D6+D7+D8+D9+D10+D11+D12+D13+D14)

B. =total(Dr:D15)

C. sum=(d4:d15)

D. =sum(D4:D15)

D. =sum(D4:D15)

92. Which one of the following an important consideration when using a software package for bookkeeping tasks within a company?

A. Acquiring a sophisticated package

B. Training employees to input the information properly

C. Checking that the procedures built into the program follow GAAP

D. Purchasing a program that will generate all required statements

B. Training employees to input the information properly

93. Which one of the following actions would result in an error or incorrect paycheck for an employee?

A. Transposing the dental insurance deduction amount

B. Miscalculating the total gross pay manually when verifying the payroll

C. Including a dental insurance deduction in the wrong column

D. Leaving one of the required information boxes blank

A. Transposing the dental insurance deduction amount

94. What must be included in a bookkeeping software package in order for it to work well for a _____?

A. Ease of the use by employees

B. That the company information is input property

C. The basic reports that the company uses

D. Reports that the company may desire in the future

C. The basic reports that the company uses

95. When purchasing financial management software packages for a company, what is an important consideration?

A. The program should be sophisticated enough to accommodate the changes expected within the company over three to five years.

B. All the desired functions should be included.

C. All employees should have input as ro what services/reports must be included

D. The benefits of the information provided must exceed the costs related to the purchase and implementation of the package selected

D. The benefits of the information provided must exceed the costs related to the purchase and implementation of the package selected

96. What is the term for the affected parties in an unethical situation?

A. Interested Parties

B. Shareholders

C. Invested parties

D. Stakeholders

D. Stakeholders

97. What is the first step taken by company management regarding policies for ethical behavior?

A. Set hiring policies

B. Develop workspace etiquette

C. Communicate ethical expectations to employees

D. Identify the issues

D. Identify the issues

98. Professional organizations and individual businesses have developed ethical standards. Which one of the following is not true regarding ethical standards?

A. Companies develop their own standards for employees

B. Standards are guidelines and not laws.

C. Company ethical standards are communicated to all employees.

D. Multinational companies expect their employees in other countries to have different ethical standards

D. Multinational companies expect their employees in other countries to have different ethical standards

99. Which one of the following indicates that the company feels good ethical behavior is important?

A. Establishing a policy of expected ethical behavior

B. Posting the policies in obvious locations throughout the company offices

C. Clearly communicating the policies

D. Taking action regarding instances of unethical behavior

D. Taking action regarding instances of unethical behavior

100. Which one of the following is an internet information privacy issue at a company level?

A. Economic espionage

B. Cyber-extortion

C. Phreaking

D. Posing

A. Economic espionage