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Accounting NOCTI

Total questions: 125

Worksheet time: 1hrs 4mins

Name
Class
Date
1.

What category does a company's patents and trademarks typically fall under in its financial statements?

a)
Assets
b)
Liabilities
c)
Equity
d)
Expenses
2.

Which of the following represents revenue for a manufacturing company?

a)
Interest income from investments
b)
Sales of goods to customers
c)
Salary payments to employees
d)
Insurance premiums paid
3.

Which method ensures segregation of duties in controlling cash receipts?

a)
Reconciling bank statements monthly
b)
Allowing the same person to handle cash receipts and disbursements
c)
Using a petty cash fund for small expenditures
d)
Having different employees approve and record cash transactions
4.
4.) What is the term for accounts receivable that a company determines are unlikely to be collected?
a)
Bad debts
b)
Uncollectible revenue
c)
Allowance for doubtful accounts
d)
Write-offs
5.

Which inventory costing method assumes that the most recent costs are the first to be allocated to cost of goods sold?

a)
FIFO (First-In, First-Out)
b)
LIFO (Last-In, First-Out)
c)
Weighted average cost
d)
Specific identification
6.

What method spreads the cost of an asset evenly over its useful life?

a)
Straight-line depreciation
b)
Double-declining balance method
c)
Units-of-production depreciation
d)
Sum-of-the-years'-digits method
7.

How are accounts payable typically classified on the balance sheet?

a)
Current liability
b)
Long-term liability
c)
Equity
d)
Revenue
8.

What type of debt instrument is typically repayable in more than one year?

a)
Notes payable
b)
Bonds payable
c)
Accounts payable
d)
Accrued liabilities
9.
9.) When a company issues additional shares of common stock, what happens to equity?
a)
Equity increases
b)
Equity decreases
c)
Equity remains unchanged
d)
Equity becomes a liability
10.

Which of the following represents an accrual adjustment?

a)
Recording cash received from customers
b)
Recognizing interest expense incurred but not yet paid
c)
Paying salaries to employees
d)
Purchasing equipment with cash
11.

How is the component percentage for gross profit typically calculated?

a)
Net IncomeNet Sales×100\frac{\text{Net Income}}{\text{Net Sales}} \times 100Net SalesNet Income×100
b)
Gross ProfitNet Sales×100\frac{\text{Gross Profit}}{\text{Net Sales}} \times 100Net SalesGross Profit×100
c)
Operating ExpensesNet Sales×100\frac{\text{Operating Expenses}}{\text{Net Sales}} \times 100Net SalesOperating Expenses×100
d)
Cost of Goods SoldNet Sales×100\frac{\text{Cost of Goods Sold}}{\text{Net Sales}} \times 100Net SalesCost of Goods Sold×100
12.

If a company's net sales are $500,000 and its operating expenses are $150,000, what is the operating expense component percentage?

a)
30%
b)
25%
c)
35%
d)
40%
13.
13.) What is one primary purpose of financial statement analysis?
a)
To determine tax liabilities for the company
b)
To evaluate the financial health and performance of the company
c)
To calculate the exact amount of cash on hand
d)
To determine the cost of raw materials
14.
14.) Which of the following can be identified through horizontal analysis of financial statements?
a)
The proportion of revenue allocated to expenses
b)
Trends in financial performance over time
c)
The company's market share
d)
The efficiency of operational processes
15.
15.) What does a high percentage of cost of goods sold (COGS) relative to net sales indicate?
a)
Higher gross profit
b)
Lower profitability
c)
High operating efficiency
d)
Strong cash flow
16.
16.) Which financial statement would best help an analyst assess a company’s liquidity?
a)
Income Statement
b)
Balance Sheet
c)
Statement of Cash Flows
d)
Statement of Retained Earnings
17.
17.) Which ratio measures a company’s ability to meet its short-term liabilities using its most liquid assets?
a)
Current ratio
b)
Quick ratio
c)
Debt-to-equity ratio
d)
Gross profit margin
18.
18.) In a common-size income statement, which line item is typically assigned 100%?
a)
Gross profit
b)
Net income
c)
Operating expenses
d)
Net sales
19.
19.) What can be learned by analyzing the debt-to-equity ratio of a company?
a)
The proportion of financing from creditors versus owners
b)
The company’s profitability
c)
The efficiency of asset utilization
d)
The rate of return on investments
20.
20.) What is the primary purpose of calculating a company’s return on equity (ROE)?
a)
To measure the company’s liquidity
b)
To assess how efficiently equity is generating profits
c)
To determine the company’s cash flow position
d)
To evaluate the company’s revenue growth
21.
21.) What happens to the accounting equation when a company purchases equipment by paying cash?
a)
Assets increase, liabilities increase
b)
Assets increase, equity increases
c)
One asset increases, another asset decreases
d)
Assets decrease, equity decreases
22.
22.) Why are adjusting entries necessary in the accounting process?
a)
To record transactions that occur at the end of the fiscal year
b)
To ensure that revenues and expenses are recognized in the correct period
c)
To account for transactions not involving cash
d)
To simplify the preparation of financial statements
23.
23.) If a company has earned $5,000 in revenue during December but has not yet billed the customer, which adjusting entry is required?
a)
Debit Accounts Receivable; Credit Cash
b)
Debit Cash; Credit Revenue
c)
Debit Accounts Receivable; Credit Revenue
d)
Debit Revenue; Credit Accounts Receivable
24.
24.) What is the primary purpose of the closing process in accounting?
a)
To update the general ledger for the new accounting period
b)
To prepare temporary accounts for the next accounting period
c)
To ensure that all transactions have been recorded
d)
To adjust for accrued revenues and expenses
25.
25.) Which account is NOT closed during the closing process?
a)
Revenue
b)
Expenses
c)
Dividends
d)
Retained Earnings
26.
26.) Which of the following is an external user of financial information?
a)
Company management
b)
Employees
c)
Creditors
d)
Internal auditors
27.
27.) Which of the following is NOT a primary use of financial statements?
a)
Assessing a company’s profitability
b)
Predicting future cash flows
c)
Determining tax liabilities
d)
Evaluating management’s performance
28.
28.) What does the income statement primarily show?
a)
The company’s financial position at a specific point in time
b)
The company’s revenues and expenses over a period of time
c)
The company’s cash inflows and outflows
d)
Changes in the company’s equity
29.
29.) How does the balance sheet relate to the income statement?
a)
The income statement reports retained earnings, which is part of equity on the balance sheet
b)
The balance sheet lists revenues and expenses that are detailed in the income statement
c)
Both statements focus solely on cash transactions
d)
The income statement reports liabilities that are shown on the balance sheet
30.
30.) Which financial statement is most useful to investors for evaluating a company’s profitability?
a)
Income Statement
b)
Balance Sheet
c)
Statement of Cash Flows
d)
Statement of Retained Earnings
31.
31.) Which of the following is a typical career path in the accounting profession?
a)
Tax Accountant
b)
Auditor
c)
Management Accountant
d)
All of the above
32.
32.) Why is a code of ethics necessary in the accounting profession?
a)
To enforce legal compliance
b)
To ensure accountants maintain trust and integrity in financial reporting
c)
To simplify accounting practices
d)
To ensure accountants maximize company profits
33.
33.) Which of the following is an ethical responsibility of accountants?
a)
To maintain confidentiality of client information
b)
To falsify financial records when asked by management
c)
To maximize revenue at all costs
d)
To ignore auditing standards for small businesses
34.
34.) Which organization issues the Code of Professional Conduct for Certified Public Accountants (CPAs) in the United States?
a)
Financial Accounting Standards Board (FASB)
b)
Public Company Accounting Oversight Board (PCAOB)
c)
American Institute of Certified Public Accountants (AICPA)
d)
International Accounting Standards Board (IASB)
35.
35.) Which of the following taxes is typically withheld from an employee's paycheck?
a)
Property tax
b)
Federal income tax
c)
Capital gains tax
d)
Sales tax
36.
36.) If an employee works 40 regular hours at $20/hour and 10 overtime hours at $30/hour, what is the employee's gross pay?
a)
$800
b)
$1,000
c)
$1,100
d)
$1,300
37.
37.) What is the purpose of Social Security tax withholdings?
a)
To fund retirement, disability, and survivor benefits
b)
To pay for federal defense spending
c)
To support state infrastructure projects
d)
To fund public education
38.
38.) If an employee's gross pay is $2,500 and the following withholdings apply: Federal income tax ($300), Social Security tax ($155), Medicare tax ($36), and health insurance premium ($200), what is the employee's net pay?
a)
$2,000
b)
$1,809
c)
$2,364
d)
$2,086
39.
39.) Which of the following is considered a voluntary deduction from an employee's paycheck?
a)
Federal income tax
b)
Social Security tax
c)
Health insurance premiums
d)
Medicare Tax
40.
40.) Which of the following is included in gross pay calculations?
a)
Overtime pay
b)
Bonuses
c)
Commissions
d)
All of the above
41.

Which of the following roles involves preparing and examining financial records for compliance with laws and regulations?

a)
Tax Accountant
b)
Auditor
c)
Management Accountant
d)
Cost Accountant
42.

What is the primary responsibility of a forensic accountant?

a)
Managing a company’s day-to-day financial transactions
b)
Investigating fraud and disputes involving financial data
c)
Preparing budgets and forecasting future costs
d)
Auditing financial statements for regulatory compliance
43.
43.) An accountant is pressured by their manager to omit certain liabilities from the financial statements to make the company’s financial position appear stronger. What should the accountant do in line with ethical standards?
a)
Follow the manager’s instructions
b)
Ignore the pressure and report the liabilities accurately
c)
Record the liabilities in a separate, hidden document
d)
Resign immediately without explanation
44.
44.) Which of the following best describes integrity as it applies to accountants?
a)
The ability to adapt to new financial regulations
b)
Acting honestly and fairly without compromising ethical principles
c)
Ensuring financial statements comply with tax laws
d)
Demonstrating superior knowledge of accounting standards
45.
45.) What is the consequence of an accountant violating the code of ethics, such as engaging in fraudulent reporting?
a)
Immediate dismissal from their job
b)
Legal penalties, including fines or imprisonment
c)
Damage to their professional reputation and certification
d)
All of the above
46.
46.) An employee earns $25/hour and works 45 hours in a week. If overtime is paid at 1.5 times the regular rate, what is the employee’s gross pay?
a)
$1,125
b)
$1,137.50
c)
$1,200
d)
$1,250
47.
47.) If Social Security tax is 6.2% and Medicare tax is 1.45%, what is the total FICA tax for an employee with a gross pay of $3,000?
a)
$186
b)
$210
c)
$234
d)
$255
48.
48.) An employee has the following withholdings from their paycheck: federal income tax ($450), state income tax ($150), FICA taxes ($200), and health insurance premiums ($100). If their gross pay is $3,000, what is their net pay?
a)
$2,100
b)
$2,250
c)
$1,250
d)
$2,225
49.
49.) Which of the following taxes is paid equally by both the employer and the employee?
a)
Federal income tax
b)
Social Security tax
c)
State income tax
d)
Health insurance premiums
50.

Which of the following is considered additional compensation included in gross pay?

a)
Regular hourly wages only
b)
Bonuses and commissions
c)
Employee health insurance deductions
d)
Federal income tax
51.
51.) What principle ensures that accountants provide accurate and unbiased financial information?
a)
Transparency
b)
Objectivity
c)
Professional skepticism
d)
Compliance
52.
52.) Which accounting role is focused on internal controls and ensuring the accuracy of a company’s financial records?
a)
Cost Accountant
b)
Internal Auditor
c)
Financial Analyst
d)
Payroll Specialist
53.
53.) An employee’s gross pay is $4,000, and their deductions are as follows: Federal tax ($600), FICA tax ($300), state tax ($200), and health insurance ($150). What is their net pay?
a)
$2,750
b)
$2,950
c)
$3,000
d)
$3,250
54.
54.) Which of the following is NOT a statutory deduction from an employee’s paycheck?
a)
Federal income tax
b)
Medicare tax
c)
401(k) contribution
d)
Social Security tax
55.

Things a business owns that have value and can be used to generate revenue.
Examples:

  • Cash in the company’s bank account

  • Office buildings, company vehicles, and computers

  • Inventory (products a business plans to sell)

a)

Assets

b)

Liabilities

c)

Owners Equity

56.

Definition: Debts or obligations a business owes to others.
Examples:

  • A loan from a bank that must be paid back

  • Money owed to suppliers for inventory purchases (accounts payable)

  • Salaries payable to employees

a)

Assets

b)

Liabilities

c)

Owners Equity

57.

Costs a business incurs to operate.
Examples:

  • Rent for an office space

  • Employee wages and salaries

  • Utility bills (electricity, water, internet)

  • Advertising costs

a)

Expense

b)

Revenue

c)

Asset

58.

Which of the following is an example of a liability?

a)

A company’s delivery truck

b)

The cash a business has in its bank account

c)

A business loan that must be repaid

d)

A company’s revenue from sales

59.

Owner’s equity can be calculated using which equation?

a)

Assets – Liabilities = Equity

b)

Liabilities + Revenue = Equity

c)

Assets + Liabilities = Equity

d)

Assets – Revenue = Equity

60.

Revenue is best described as:

a)

Money a business earns from selling goods or services

b)

The amount a company pays for rent and salaries

c)

Extra profit from selling an old piece of equipment

d)

A business’s total expenses in a month

61.

What does FIFO (First-In, First-Out) mean in inventory management?

a)

The newest inventory is sold first

b)

The oldest inventory is sold first

c)

Inventory is sold based on highest value first

d)

Inventory is only recorded when it is completely sold

62.

What is an example of an expense transaction?


a)

A company paying for internet services

b)

A company receiving a payment from a customer

c)

A company taking a loan from the bank

d)

A company purchasing land

63.

What does the balance sheet show?

a)

The total income and expenses of a company

b)

The flow of cash in and out of a business

c)

The amount of revenue a company has earned in a given period

d)

A company's financial position, listing assets, liabilities, and equity

64.

If a business owner invests their personal money into the business, how is this recorded?

a)

As a liability

b)

as an equity transaction

c)

As a business expense

d)

As revenue

65.

What is an example of a revenue transaction?

a)

A company paying its electricity bill

b)

A company receiving payment from a customer for a sale

c)

A company purchasing new inventory

d)

A company taking a loan from the bank

66.

Which inventory valuation method assumes that the most recently purchased items are sold first?

a)

FIFO (First-In, First-Out)

b)

LIFO (Last-In, First-Out)

c)

Weighted Average

d)

Cost Method

67.

What is an example of an accrual transaction?

a)

Paying rent for the next month in advance

b)

Receiving a loan from a bank

c)

Recording revenue before receiving payment from a customer

d)

Paying an invoice immediately when purchasing supplies

68.

What is an example of a short-term debt?

a)

A 10-year bank loan used to purchase equipment

b)

A mortgage on an office building

c)

A business credit card bill due in 30 days

d)

Shares of stock purchased by the company

69.

If a company writes off an uncollectible account, what does that mean?

a)

The company has paid off a loan early

b)

The company removed a debt from its records because it cannot be collected

c)

The company has gained extra revenue from a sale

d)

The company borrowed more money to pay its bills

70.

Which of the following is NOT an accounting career?

a)

Tax preparer

b)

Auditor

c)

Lawyer

d)

Financial analyst

71.

What should an accountant do if they find out a co-worker is committing fraud?

a)

Help the co-worker cover it up

b)

Ignore it to avoid conflict

c)

Report the fraud to a supervisor or legal authority

d)

Destroy the financial records to erase evidence

72.

Which of the following is an example of professional behavior in accounting?

a)

Taking a company’s financial information for personal gain

b)

Avoiding conflicts of interest and staying unbiased

c)

Changing financial reports to benefit a client

d)

Hiding errors to protect a company’s reputation

73.

Which of the following is an example of unethical behavior in accounting?

a)

Properly recording all business transactions

b)

Overstating revenue to make a company seem more profitable

c)

Following accounting regulations and laws

d)

Reporting financial losses honestly

74.

Which of the following is NOT a typical career path within the accounting profession?

a)

Financial Analyst

b)

Tax Accoountant

c)

Auditor

d)

Civil Engineer

75.

What is the primary role of a forensic accountant?

a)

Preparing tax returns

b)

Investigating financial fraud

c)

Managing company payroll

d)

Auditing financial statements

76.

Which certification is commonly pursued by accountants aiming to specialize in internal auditing?

a)

CPA (Certified Public Accountant)

b)

CMA (Certified Management Accountant)

c)

CIA (Certified Internal Auditor)

d)

CFA (Chartered Financial Analyst)

77.

Which ethical principle requires accountants to be honest and straightforward in all professional relationships?

a)

Integrity

b)

Confidentiality

c)

Professional Behavior

78.

Which organization establishes the Code of Professional Conduct for accountants in the United States?

a)

Financial Accounting Standards Board (FASB)

b)

Securities and Exchange Commission (SEC)

c)

American Institute of Certified Public Accountants (AICPA)

d)

International Accounting Standards Board (IASB)

79.

An employee earns $12 per hour and worked 40 regular hours and 8 overtime hours in a week. Overtime is paid at 1.5 times the regular rate. What is the employee's gross pay for the week?
Calculation Formula (hours worked X $ per hour) + (8 hours X overtime per hour) = gross pay for the week.
Note: the overtime hourly rate is X 1.5 = overtime per hour

a)

$576

b)

$624

c)

$672

d)

$720

80.

A company pays its employees bi-weekly. An employee's annual salary is $42,000. What is the gross pay per pay period?
Calculation : annual salary divided by 26 periods.

a)

$1,615.38

b)

$1,750.00

c)

$1,961.54

81.

An employee's gross pay for the week is $900. The following deductions apply: 

Federal Income Tax: $110

Social Security Tax: 6.2%

Medicare Tax: 1.45%

State Income Tax: $25
What is the social security tax deduction for the pay period?

a)

$55.80

b)

$13.05

c)

$110.00

d)

$25

82.

An employee's gross pay for the week is $900. The following deductions apply: 

Federal Income Tax: $110

Social Security Tax: 6.2%

Medicare Tax: 1.45%

State Income Tax: $25
What is the Medicare Tax deduction for the pay period?

a)

$55.80

b)

$13.05

c)

$110.00

d)

$25

83.

Many individuals with an accounting degree go on to become a company's:

a)

Chief Financial Officer (CFO)

b)

Human Resources Manager

c)

Marketing Director

d)

Operations Supervisor

84.

Which inventory valuation method results in the highest cost of goods sold during periods of rising prices?

a)

Last-In, First-Out (LIFO)

b)

First-In, First-Out (FIFO)

85.

Method is an inventory valuation approach that calculates the average cost of all units available for sale during a specific period. This average cost is then assigned to the cost of goods sold (COGS) and the ending inventory. 
Formula for WAC per unit = the cost of goods available for sale divided by the units available for sale.

a)

Weighted Average Cost

b)

Specific Identification

86.

Which document is essential for reconciling the cash balance per books with the cash balance per bank?

a)

Income Statement

b)

Bank Statement

c)

Balance Sheet

87.

Which of the following is considered a 'gain' in accounting?

a)

Revenue from the sale of goods.

b)

Profit from the sale of a long-term asset above its book value.

c)

Interest paid on a bank loan.

88.

Equity' in accounting refers to:

a)

The total revenues earned by a company during a specific period.

b)

The residual interest in the assets of a company after deducting liabilities.

c)

The obligations a company owes to its creditors.The obligations a company owes to its creditors.

89.

An accounting report that is used to show revenue and expenses is the

a)

Loss and Profit Statement

b)

Revenue and Expenses Statement

c)

The Profit or Loss Statement

d)

The Income Statement

90.

.A financial statement that reports assets, liabilities, and owner’s equity on a specific date.

a)

profit and loss statement

b)

cash flow

c)

balance sheet

d)

income statement

91.

method is an accelerated depreciation technique that allocates a larger depreciation expense in the earlier years of an asset's useful life, decreasing over time. This approach is based on the assumption that assets are more productive and lose value more rapidly in their initial years.

a)

Sum-of-the-Years'-Digits (SYD)

b)

Units of Production Method

c)

Declining-Balance Method

d)

Straight-Line Method

92.

Method is an accelerated depreciation technique that allocates a higher depreciation expense in the earlier years of an asset's useful life, with the expense decreasing over time. This method is based on the assumption that assets lose their value more rapidly in the initial years of usage.

a)

Sum-of-the-Years'-Digits (SYD)

b)

Units of Production Method

c)

Declining-Balance Method

d)

Straight-Line Method

93.

Method is a depreciation technique that allocates an asset's cost based on its actual usage, activity, or units produced rather than the passage of time. This method is particularly suitable for assets whose wear and tear correlate more closely with their operational output than with their age, such as machinery, vehicles, or equipment used in manufacturing.

a)

Sum-of-the-Years'-Digits (SYD)

b)

Units of Production Method

c)

Declining-Balance Method

d)

Straight-Line Method

94.

Which of the following transactions would increase stockholders' equity?

a)

Issuing common stock for cash

b)

Recording depreciation expense

c)

Purchasing equipment with cash

d)

Paying dividends to shareholders

95.

Impact of Accruals on Financial Statements

How does recording an accrual affect the financial statements?

a)

Increases assets and liabilities

b)

Increases revenues and expenses

c)

Increases assets and stockholders' equity

96.

Recognizing Revenue from Sales

When a company sells goods on credit, which of the following accounts is credited?

a)

Accounts Receivable

b)

Sales Revenue

c)

Cash

97.

When a company receives payment in advance for services to be performed in the future, it records:

a)

Unearned Revenue

b)

Accounts Receivable

c)

Deferred Revenue

98.

Which of the following journal entries records depreciation expense for the period?

a)

Debit Depreciation Expense; Credit Accumulated Depreciation

b)

Debit Accumulated Depreciation; Credit Depreciation Expense

c)

Debit Depreciation Expense; Credit Equipment

d)

Debit Equipment; Credit Depreciation Expense

99.

Which of the following transactions would increase both assets and liabilities?

a)

Paying off a bank loan

b)

Purchasing equipment on credit

c)

Selling inventory for cash

d)

Receiving cash from a customer on account

100.

Why are adjusting entries necessary at the end of an accounting period?

a)

To update the general ledger for daily transactions

b)

To ensure that revenues and expenses are recognized in the correct period

c)

To prepare financial statements for external reporting

d)

To close temporary accounts to retained earnings

101.

Which of the following accounts is NOT closed at the end of the accounting period?

a)

Service Revenue

b)

Salaries Expense

c)

Cash

102.

What is the primary purpose of closing entries?

a)

To reverse the effects of double-entry bookkeeping

b)

To prepare the books for the posting process and taking a trial balance

c)

To eliminate the balances in the revenue and expense accounts so they have zero balances at the beginning of the next fiscal year

d)

To adjust the accounts for accruals and deferrals

103.

Which of the following accounts would be debited during the closing process?

a)

Service Revenue

b)

Retained Earnings

c)

Income Summary

104.

What is the purpose of preparing a post-closing trial balance?

a)

To verify that debits equal credits after closing entries

b)

To ensure that all temporary accounts have been closed

c)

To prepare for the next accounting period

d)

All of the above

105.

When completing a check stub, which of the following should be recorded?

a)

A) The check number and date only

b)

B) The payee, amount of the check, and account balance after the transaction

c)

C) Only the payee’s name

d)

D) The payee, amount of the check, and the reason for the payment

106.

What information is typically required to be entered on a deposit slip?

a)

A) The check number and the amount deposited

b)

B) The deposit amount, account number, and a list of items being deposited

c)

C) Only the amount of cash being deposited

d)

D) The date of the deposit and the account balance

107.

Which of the following best describes the process of reconciling a bank statement?

a)

A) Comparing the bank’s statement with the company’s records to ensure they match

b)

B) Making deposits into the bank account

c)

C) Issuing checks and verifying their clearance

d)

D) Confirming all online transactions are authorized

108.

Which of the following is an example of an online banking service?

a)

Writing a physical check

b)

Visiting a bank branch to deposit money

c)

Using a mobile app to transfer funds

d)

Reconciling a paper bank statement

109.

When using a debit card, which of the following is true?

a)

Debit card transactions are always paid on credit

b)

Funds are immediately withdrawn from your checking account

c)

Debit card transactions will show up on your credit report

d)

Debit cards must always be used with a PIN

110.

6. What is the primary difference between a credit card and a debit card?

a)

Credit cards take funds directly from a checking account, while debit cards extend a line of credit

b)

Debit cards involve borrowing money, while credit cards involve using your own funds

c)

Credit cards allow borrowing money, while debit cards take funds directly from a bank account

d)

There is no difference between the two

111.

What is typically involved in managing multiple bank accounts and transactions?

a)

Keeping track of balances, recording deposits, and monitoring withdrawals

b)

Keeping an eye on credit card payments

c)

Only withdrawing funds from the accounts when necessary

d)

Using online banking exclusively for transfers

112.

How often should a petty cash fund be reconciled and replenished?

a)

Only when it runs out of money

b)

Once a month, regardless of the balance

c)

Regularly, to ensure the amount matches the receipts and records

d)

Whenever a new employee starts

113.

A form of business organization owned by investors of stockholders that has a separate legal existence from its owner is a

a)

Corporation

b)

Partnership

c)

Board

114.

The equation that expresses the relationship between the accounting equations in a simple mathematical form

a)

Assets= Liabilities + Owner's Equity

b)

Assets= Owner's Equity + Liabilities

115.

The excess of revenue over total expenses

a)

Net Income

b)

Net Loss

c)

Total Income Statement

116.

Is an allocation process in which the cost of a long-term asset except land) is divided over the periods in which the asset is used in the production of the business's revenue.

a)

Depreciation

b)

Income Statement

c)

Ledger

d)

Variable

117.

If an employee works 45 hours at $10 per hour with overtime at time-and-a-half, what is their gross pay?

a)

475

b)

400

c)

75

d)

375

118.

Which financial statement shows the profitability of a business?

a)

Income statement

b)

Balance Sheet

c)

Statement of Owners Equity

119.

Why are adjusting entries necessary? To update account balances before preparing financial statements.

a)

True

b)

False

120.

Select the correct definition and Vocabulary Term:

a)

Costs incurred to earn revenue (rent, wages, utilities).er option

1.

Expenses

b)

Income earned from business operations (sales, services).

2.

Revenue

c)

liability

3.

Debts or obligations of the business (lo

d)

Owner's Equity

4.

The owner’s claim to the business assets

e)

Resources owned by a business (cash, equipment, supplies, accounts receivable).

5.

Assets

121.

Oldest inventory items are sold first.
Advantage: Shows higher net income in times of inflation.

a)

FIFO (First-In, First-Out)

b)

LIFO (Last-In, First-Out)

c)

Weighted Average Cost per Unit:

122.

Straight-Line Depreciation:
Spreads the cost evenly over the asset’s useful life.

Formula:
(Cost - Salvage Value) ÷ Useful Life

Example:
Equipment cost: $10,000
Salvage value: $1,000
Useful life: 5 years

a)

1,800

b)

1,850

123.

Which of the following is considered an asset?

a)

Salaries Payable

b)

Accounts Receivable

c)

Owner’s Equity

124.

Which inventory method results in the highest net income in times of rising prices?

a)

LIFO

b)

FIFO

c)

Weighted average

125.

Which of the following is a liability?

a)

Cash

b)

Accounts Payable

c)

Equipment

d)

Rent Expense

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