Accounting II SGO Practice Test

What is the primary purpose of the Chart of Accounts in QuickBooks?

• To track inventory levels
• To record customer and vendor information
• To organize and classify financial transactions
• To generate financial reports

Which of the following is a common internal control measure to prevent cash theft?

• Segregation of duties
• Limited access to cash
• Frequent bank reconciliations
• All of the above

What is the primary purpose of a W-2 form?

• To report employee income tax withheld
• To track employee hours worked
• To calculate payroll taxes
• To record employee deductions

Which type of business ownership is characterized by a separate legal entity from its owners?

• Sole Proprietorship
• Partnership
• Corporation
• All of the above

Which inventory valuation method assumes that the oldest units purchased are the first ones sold?

• FIFO (First-In, First-Out)
• LIFO (Last-In, First-Out)
• Average Cost
• Weighted Average

GAAP stands for Generally Accepted Accounting Principles. Which of the following is a primary purpose of GAAP?

• To ensure that financial statements are prepared consistently across companies.
• To determine the fair market value of assets.
• To maximize a company's profits.
• To prevent fraud.

While it's generally accepted that companies should maintain one set of general ledger books for accurate financial reporting, there are specific circumstances where maintaining two sets might be permissible or even necessary. Which of the following situations could justify the use of two sets of general ledger books?

• To comply with different accounting standards in different jurisdictions or countries
• To hide fraudulent activities from auditors.
• To simplify the accounting process for small businesses.
• To avoid paying taxes.

Which QuickBooks tool is used to record and track employee payroll information?

• Payroll Center
• General Journal
• Accounts Payable
• Sales Receipt

Which Financial Statement shows a company's profitability?

• Income Statement
• Balance Sheet
• Retained Earnings Statement
• Cash Flow

What is the Accounting Equation?

• Assets = Liabilities + Equity
• Revenues - Expenses = Net Income
• Beginning Inventory + Purchases = Ending Inventory + Cost of Goods Sold
• Current Assets - Current Liabilities = Working Capital