Accountant Exam

Which of the following is a current asset on the balance sheet?

• • A) Goodwill

• • B) Cash

• • C) Property, plant, and equipment

• • D) Bonds payable

Which equation represents the fundamental accounting equation?

• • A) Assets = Liabilities + Owners' Equity

• • B) Assets = Revenue + Expenses

• • C) Liabilities = Assets - Equity

• • D) Revenue = Expenses + Profit

A company receives BD 12000 in advance for a one-year subscription. If the company prepares monthly financial statements, what should be recognized each month?

• • A) BD 12000 as revenue each month

• • B) BD 2000 as revenue each month

• • C) BD 1000 as revenue each month

• • D) BD 2000 as expense each month

How is deferred revenue typically recognized on the financial statements?

• • A) As an asset

• • B) As an expense

• • C) As a liability until the service/product is provided

• • D) As income immediately

Which of the following is an example of "revenue recognition over time"?

• • A) Sale of a product in a retail store

• • B) Long-term construction contracts

• • C) Subscription-based services

• • D) Both B and C

What is a right-of-use (ROU) asset under IFRS 16?

• • A) An asset that represents the present value of the lease payments made

• • B) An asset that represents the lessee’s right to use an underlying leased asset for a specified period of time

• • C) An asset that represents the cost of lease modifications

• • D) An asset that represents ownership of the leased asset

How does IFRS 16 affect the income statement for lessees?

• • A) Lease expenses are recognized as a single expense item

• • B) Lease expenses are split into depreciation and interest

• • C) Lease expenses are only recognized when cash is paid

• • D) Lease expenses are not recorded in the income statement

What is the correct entry when a customer payment is received and deposited into the company's bank account?

• • A) Debit Accounts Receivable; Credit Bank Account

• • B) Debit Cash; Credit Accounts Payable

• • C) Debit Bank Account; Credit Accounts Receivable

• • D) Debit Sales Revenue; Credit Accounts Receivable

How is depreciation of an asset typically recorded in the General Ledger?

• • A) Debit Depreciation Expense; Credit bank Account

• • B) Debit Accumulated Depreciation; Credit Depreciation Expense

• • C) Debit Depreciation Expense; Credit Accumulated Depreciation

• • D) Debit Asset Account; Credit Depreciation Expense

What is the purpose of a trial balance?

• • A) To ensure that the company’s assets equal its liabilities

• • B) To ensure that the total debits equal the total credits

• • C) To summarize the company’s income and expenses

• • D) To determine the company’s net income for the period