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WorksheetsBASIC ACCOUNTING THEORIES BSA/BSAIS
Total questions: 20
Worksheet time: 10mins
1.) These activities are those transactions which are conducted to generate revenue for the business.
Financing activities
Operating activities
Investing activities
None of the choices
2.) The process of grouping into specific category various economic transactions which are similar and identical in nature.
Classifying
Recording
Reporting
Identifying
3.) It is also composed of twelve months but starts from any month other than January.
Accounting year
Calendar year
Interim period
Fiscal year
4.) A qualitative characteristic of accounting which states that, accounting information must be available on time when needed if it is to influence decisions
Timeliness
Reliability
Relevance
Faithful Representation
5.) It means recognizing an incurred and unrecorded expense that remains unpaid because payment is not yet due.
Accrued Revenue
Prepaid Asset
Accrued Expense
Prepaid Expense
6.) This error is committed when figures are interchanged. The effect of this error may overstate or understate the amount of the related transactions.
Transplacement
Transposition
Error in accounting titles
Error of omission
7.) This account is used as another ‘temporary account’ in which the revenue and the expense account are initially
closed.
Expense account
Income account
Withdrawal account
Income summary account
8.) It is the allocation of the acquisition costs of an intangible asset over its legal or accounting estimated life.
Depreciation
Amortization
Appreciation
None of the choices
A company using this inventory system maintains a continuous record of the changes of the physical quantities in its inventory.
Periodical Inventory System
Perpetual Inventory System
None of the choices
All of the choices
A promissory note received by the business from its debtors and/or customers.
Cash
Accounts payable
Notes receivable
Cash equivalents
11.) Net sales is sales less
Sales discounts
Sales returns
Sales returns and allowances
Sales discounts and sales returns and allowances
12.) Which of the following are in accordance with generally accepted accounting principles?
Accrual basis accounting
Cash basis accounting
Both accrual basis and cash basis accounting
Neither accrual basis nor cash basis accounting
13.) The revenue recognition principle dictates that revenue should be recognized in the accounting records
When cash is received
At the end of the month
In the period that income taxes are paid
When it is earned
14.) Which of the following would not result in unearned revenue?
Rent collected in advance from tenants
Services performed on account
Sale of season tickets to football games
Sale of two-year magazine subscription
15.) If a business has received cash in advance of services performed and credits a liability account, the adjusting entry needed after the services are performed will be
debit Unearned Revenue and credit Cash
debit Unearned Revenue and credit Service Revenue
debit Unearned Revenue and credit Prepaid Expense
debit Unearned Revenue and credit Accounts Receivable
16.) In the balance sheet, ending merchandise inventory is reported
In current assets immediately following accounts receivable
In current assets immediately following prepaid expenses
In current assets immediately following cash
Under property, plant and equipment
17.) If business pays rent in advance and debits a Prepaid Rent account, the company receiving the rent payment will credit
Cash
Prepaid rent
Unearned rent revenue
Accrued rent revenue
18.) In a perpetual inventory system, a return of defective merchandise by a purchaser is recorded by crediting
Purchases
Purchase allowance
Purchase returns
Merchandise inventory
19.) Which of the following transactions is recorded with the same entry in a perpetual and periodic inventory system?
Sale of merchandise on credit
Payment of freight cost on a purchase
Cash received on account with a discount
Return of merchandise sold
20.) A sales return and allowances accounts is not debited if a customer
Returns defective merchandise
Utilizes a prompt payment incentive
Receives a credit for merchandise of inferior quality
Return goods that are not in accordance with specifications
