Accounting Knowledge MCQ Questions Answers

1. Amounts owed for products or services purchased on account are called ________.

2. A company should ________ when projecting cash receipts for a given month.

3. Both job order costing and process costing ________.

4. Scientific method models link __________ with __________.

5. Ideally, what can sales analysis improve for a company ?

6. What source of income can for profit's obtain that not for profit's cannot?

7. Expenses for a not for profit entity are reported as what functions? (check all that apply)

8. The difference in payroll accounting for nonprofit versus for profit institutions is best explained by which of the following? (check all that apply)

9. Balance sheet accounts are described as what kind of accounts?

10. The accounts shown in the chart of accounts can be classified into what two categories? (check all that apply)

11. What amount would be paid for an invoice for $8,500 that states “2/10, net 30” if you paid within 6 days?

12. What is the purpose of the schedule of accounts payable?

13. Select the correct institution that establishes the financial reporting requirements for the non-profit accounting process.

14. What are the general asset classes for non-profit organizations? (check all that apply)

15. One of your customers purchased $1,000 on account during the fiscal year. In June of that year they filed for bankruptcy and were unable to remit the balance owed to your company. What is the adjusting entry for this scenario?

16. The main difference between for profit and not for profit entities is that not for profit entities do not have _____.

17. What kind of account is accounts payable?

18. Difference between gross pay and net pay?

19. What are the three primary payroll deductions that federal law requires? (check all that apply)

20. Which is example of payroll liabilities? (check all that apply)

21. Find and correct the error(s) in the following general journal entry which recorded a company’s payroll liability: DR Office Salaries Expense, $1,000; CR Social Security Tax Expense, $200. DR Health Insurance Premium Expense, $50. DR Cash, $750. (check all that apply)

22. In which type of account are payroll deductions recorded?

23. What type of account is a wage expense account?

24. How does the recording for bad debt expenses differ between the method required for GAAP versus the IRS requirement?

25. What account would be debited in a payroll journal entry?

26. If a customer makes a return that was purchased on credit, what account would be debited?

27. How is the general ledger accounting information organized?

28. Many not for profit organizations can gain tax exempt status, what tax/taxes does that make them exempt from?

29. Which accounts are considered income statement accounts? (check all that apply)

30. What inventory cost flow assumption is it where the oldest purchased goods are linked to the most recent revenue recognized?

31. BYX is a manufacturing facility who just completed a production cycle of their circuit boards. By the end of the cycle they paid $500 for manufacturing labor, $400 for utilities and other overhead, and calculated $100 for plant equipment depreciation. Which set of journal entries accurately reflects the above transaction series?

32. Which is true about comparing LIFO and FIFO methods? (check all that apply)

33. What inventory cost flow assumption do companies that sell nonperishable goods usually use?

34. Due to the time value of money, it is safe to assume that costs will rise over time, because of this which inventory cost flow assumption produces the most profit on paper?

35. What is another commonly known term for accounts payable?

36. Which sectors are not for profit organizations a part of? (check all that apply)

37. Which accounts are considered balance sheet accounts? (check all that apply)

38. Failure to record an adjusting entry may have which affect on the financial statements? (check all that apply)

39. Which is temporary accounts? (check all that apply)

40. Revenue is only recognized when it is: (check all that apply)

41. For a not for profit organization, how is the profit distributed?

42. Which tax is the employer required to match? (check all that apply)

43. What is the name of the amount that an employee has earned but has not yet been paid at the end of the accounting period?

44. Which method do most company’s use in the preparation of their Statement of Cash Flows?

45. How is the general journal information organized?

46. What inventory cost flow assumption is banned by International Reporting Standards (IFRS) but can still be used under Generally Accepted Accounting Principles (GAAP)?

47. BYX has a retail subsidiary that sells sporting goods equipment. On May 15th, BYX sporting goods had credit card sales totaling $1,000. The credit card company charges a 2.75% fee for the daily total transactions. The sales tax rate is 8%. Which of the following is the correct transaction analysis?

48. Home Refurbishing, Inc. provides a 25% trade discount on a list price of $5,000. Which of the following amounts is the correct way to record the sale?

49. BYX sold and delivered $50,000 worth of goods to customer A, who agreed to Cash n/30 terms. The cost to manufacture the goods was $10,000. Which of the accounts will be increased as a result of this transaction? (check all that apply)

50. What are the main objectives of using sales analysis? (check all that apply)

51. What discount amount would be received for an invoice for $5,000 that states “2/10, net 30” if you paid within 8 days?

52. When you issue an invoice that states '2/10, net 30' what period does the 10 stand for?

53. What financial statement would you request to see if you wanted to look into a company’s revenues and expenses for a specific period of time?

54. You would find the allowance for bad debt account on the __ (check all that apply).

55. What ratio would accounts payable be found in?

56. What type of balance can a contra account have?

57. At what point does the buyer have ownership of the goods in a FOB destination situation (check all that apply)?

58. How many accounts can be affected in a single journal entry?

59. Should the accounts payable balance be decreased by a credit or debit?

60. What is the FICA percentage withheld from gross wages up to $118,500 for 2016?

61. What is a common name used for suppliers?

62. The amount of FICA that would be withheld in 2016 on an employee's salary of $45,000 would be _____ (rounded to the nearest dollar).

63. ___ insurance is a cost that the employer incurs to cover work-related injuries.

64. At what point does accrual based accounting recognize revenue?

65. What is the contra account related to accounts receivable?

66. For a not for profit entity, what financial statement would you request to see to view their revenues and expenses?

67. On the balance sheet, prepaid insurance could be reported as a _____ (check all that apply).

68. An example of a court ordered withholding is ____ (check all that apply).

69. Hourly paid employee's pay is usually referred to as _____.

70. _____ is permitted financing for a not for profit entity.

71. What is the amount that an employee actually receives before taxes and all withholdings on their check referred to as (check all that apply)?

72. Check all subgroups that sales analysis could be broken down into (check all that apply):

73. What does FICA refer to (check all that apply)?

74. For a not for profit entity, assets = liabilities + __.

75. For a not for profit entity, what financial statement would you request to view their assets and liabilities?

76. For a not for profit entity, the Statement of cash flows can be prepared using what method?

77. Accounts receivable is often referred to as buying on _____ (check all that apply).

78. An employee completes a _____ form to verify their identity and employment eligibility.

79. Which is liability accounts? (check all that apply)

80. What is a general ledger?

81. If a company returned goods to their vendor, would accounts payable be debited or credited?

82. Typically, what is a not for profit entities main source of revenue?

83. __ is a list of the company's accounts, whether they contain a balance or not (check all that apply).

84. Who contributes to FICA (check all that apply)?

85. The employer pays the ____ tax which is 0.06% taken from the first $7,000 of each employee's annual income.

86. Sales analysis is beneficial for a __ entity.

87. An employee completes a _____ form to show their exemptions/dependents they need withheld for income tax purposes.

88. For a for profit entity, assets = liabilities + _____.

89. On the balance sheet, inventory is reported as a _____ (check all that apply).

90. What financial statement would you request to view the cost of goods sold balance?

91. If you were at a grocery store and saw an employee moving the oldest food items to the front and stocking the newer items in the back, what inventory cost flow assumption are they most likely using?

92. Who pays the shipping costs in a FOB destination situation?

93. Check all groups that are related to inventory control (check all that apply):

94. If you were looking at the balance sheet, what value would the inventory account be shown at?