Accounting knowledge Quiz # 2

At what point does accrual based accounting recognize revenue?

When the money is collected

When the contract is signed

When the goods are delievered/service is completed

All of the above

None of the above

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

Unemployment

Worker's compensation

Medicare

Social Security

None of the above

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).

$653

$2,790

$3,443

$6,885

What is a common name used for suppliers?

Salesmen

Marketers

Vendors

Dealers

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

1.45%

6.20%

7.65%

None of the above

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

Debit

Credit

All of the above

None of the above

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

Zero

Only one

Only two

Two or more

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

Seller's warehouse

Seller's shipping dock

Seller's delivery truck

None of the above

What type of balance can a contra account have?

Credit

Debit

Zero

All of the above

What ratio would accounts payable be found in?

Gross margin ratio

Current ratio

Return on assets

All of the above

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

Balance Sheet

Statement of Cash Flows

Statement of Changes in Equity

Income Statement

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?

Balance Sheet

Statement of Cash Flows

Statement of Changes in Equity

Income Statement

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

Payment

Coupon

Discount

None of the above

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

$0

$50

$100

$150

None of the above

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

Find market opportunities

Decrease expenses

Increase revenues

Discover product demand

All of the above

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)

Accounts Payable

Cost of Goods Sold

Revenue

Retained Earnings

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?

$1,250

$3,750

$5,000

$6,250

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?

DR: Cash, DR: Credit Card Expense; CR: Deferred Sales Tax, CR: Cost of Goods Sold

DR: Cash, DR: Credit Card Expense; CR: Sales Tax Payable, CR: Sales

DR: Cash, DR: Credit Card Expense; CR: Accrued Expenses Payable, CR: Sales

DR: Accounts Receivable, DR: Credit Card Expense; CR: Sales Tax Payable, CR: Cost of Goods Sold

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

FIFO

LIFO

Specific Identification Method

Weighted Average

None of the above

How is the general journal information organized?

Date order

Transaction amount order (from highest to lowest)

Alphabetical order

Account order

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

Direct method for financing and investing activities; indirect method for the operating section.

Indirect method for financing and investing activities, direct method for the operating section.

Direct method is used for financing, investing and operating activities.

Indirect method is used for financing, investing and operating activities.

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?

Accounts payable

Unpaid wages

Payroll expense

None of the above

Which of the following taxes is the employer required to match? (check all that apply)

Medicare

Social security

FICA

All of the above

None of the above

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

To shareholders

To employees/clients

Back into the organization

None of the above

Choose the selection below that makes the following sentence true: Revenue is only recognized when it is: (check all that apply)

Earned

Realized

Recorded in accounts receivable.

Recorded in the cash account.

Which of the following are temporary accounts? (check all that apply)

Advertising Expense

Goodwill

Owner’s Drawing

Preferred Stock

Failure to record an adjusting entry may have which of the following affects on the financial statements? (check all that apply)

Liabilities may be understated on the balance sheet.

Expenses may be understated on the income statement.

Accumulated Depreciation will be overstated on the income statement.

Net Income will be overstated on the income statement.

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

Retained earnings

Payroll taxes payable

Buildings

Sales

All of the above

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

Retail

Health

Religion

Sports

All of the above

What is another commonly known term for accounts payable?

Trade debtors

Trade creditors

All of the above

None of the above

Quiz:	Accounting knowledge Quiz # 2
Subject:	Basic Accounting Test
Total Questions:	94 MCQs
Time:	94 Minutes