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Accounting Final Exam Review

Total questions: 73

Worksheet time: 58mins

Name
Class
Date
1.

Which of the following accounts normally has a credit balance?

a)

Cash

b)

Sales Revenue

c)

Supplies

d)

Prepaid Insurance

2.

What is the normal balance side of the Accounts Receivable account?

a)

Credit

b)

Debit

c)

Both

d)

Neither

3.

Which special journal is used to record only credit purchases of merchandise?

a)

Sales Journal

b)

Purchases Journal

c)

Cash Receipts Journal

d)

General Journal

4.

What is the term for a deduction from the invoice price granted to encourage early payment?

a)

Trade Discount

b)

Sales Tax

c)

Cash Discount

d)

Payroll Deduction

5.

Which of the following is NOT a payroll deduction?

a)

Federal Income Tax

b)

Social Security Tax

c)

Net Pay

d)

Medicare Tax

6.

If a company purchases supplies for $400 cash, which accounts are affected?

a)

Supplies and Accounts Payable

b)

Supplies and Cash

c)

Cash and Sales

d)

Supplies and Sales

7.

A business sold merchandise for 1,200onaccount.Thecostofthemerchandisewas1,200 on account. The cost of the merchandise was 700. Which accounts are affected?

a)

Accounts Receivable, Sales, Inventory, Cost of Goods Sold

b)

Cash, Sales, Inventory, Purchases

c)

Accounts Payable, Sales, Inventory, Purchases

d)

Cash, Purchases, Cost of Goods Sold, Sales

8.

If an employee earns $10 per hour and works 38 hours in a week, what is the gross pay?

a)

$380

b)

$400

c)

$420

d)

$360

9.

A company offers terms 2/10, n/30. If a customer purchases $500 of goods and pays within 10 days, how much do they pay?

a)

$500

b)

$490

c)

$480

d)

$450

10.

Which journal would you use to record the payment of utilities by check?

a)

Sales Journal

b)

Cash Payments Journal

c)

Purchases Journal

d)

General Journal

11.

Which of the following best describes a debit in accounting?

a)

An increase to a liability account

b)

An increase to an asset account

c)

An increase to a revenue account

d)

A decrease to an expense account

12.

If a company pays $250 cash for advertising, which accounts are affected?

a)

Advertising Expense and Cash

b)

Advertising Expense and Accounts Payable

c)

Cash and Accounts Receivable

d)

Advertising Expense and Sales

13.

A business receives a $600 payment from a customer on account. Which journal entry is correct?

a)

Debit Accounts Receivable 600;CreditCash600; Credit Cash 600

b)

Debit Cash 600;CreditAccountsReceivable600; Credit Accounts Receivable 600

c)

Debit Sales 600;CreditCash600; Credit Cash 600

d)

Debit Cash 600;CreditSales600; Credit Sales 600

14.

Which of the following is recorded in the cash receipts journal?

a)

Cash sales

b)

Purchases on account

c)

Credit sales

d)

Purchases returns

15.

If the total debits in a trial balance equal the total credits, what does this indicate?

a)

The accounts are correct

b)

The ledger is in balance

c)

There are no errors

d)

The company is profitable

16.

A company issues a check for $1,100 to pay for rent. Which accounts are affected and how?

a)

Debit Rent Expense 1,100;CreditCash1,100; Credit Cash 1,100

b)

Debit Cash 1,100;CreditRentExpense1,100; Credit Rent Expense 1,100

c)

Debit Rent Expense 1,100;CreditAccountsPayable1,100; Credit Accounts Payable 1,100

d)

Debit Accounts Payable 1,100;CreditCash1,100; Credit Cash 1,100

17.

What is the primary purpose of a trial balance in accounting?

a)

To calculate net income

b)

To ensure that debits equal credits

c)

To prepare financial statements

d)

To record transactions

18.

What is the effect on the accounting equation when a company purchases equipment on credit?

a)

Assets decrease, liabilities decrease

b)

Assets increase, equity increases

c)

Assets increase, liabilities increase

d)

Liabilities increase, equity decreases

19.

Which account is debited when a company receives a payment from a customer on account?

a)

Accounts Receivable

b)

Cash

c)

Sales

d)

Accounts Payable

20.

What is the effect on the accounting equation when a company pays off a liability?

a)

Liabilities increase, equity increases

b)

Assets decrease, equity decreases

c)

Assets increase, liabilities increase

d)

Assets decrease, liabilities decrease

21.

Which special journal is used to record only cash payments?

a)

General Journal

b)

Sales Journal

c)

Cash Payments Journal

d)

Purchases Journal

22.

When a company receives a $300 payment from a customer for a previous credit sale, which accounts are affected?

a)

Debit Cash, Credit Accounts Receivable

b)

Debit Accounts Receivable, Credit Cash

c)

Debit Cash, Credit Sales

d)

Debit Sales, Credit Cash

23.

A business purchases office equipment for $1,500 on credit. Which accounts are affected?

a)

Office Equipment and Accounts Payable

b)

Office Equipment and Sales

c)

Office Equipment and Cash

d)

Cash and Accounts Receivable

24.

If a company pays $200 for utilities using cash, which journal entry is correct?

a)

Debit Utilities Expense, Credit Cash

b)

Debit Cash, Credit Utilities Expense

c)

Debit Utilities Expense, Credit Accounts Payable

d)

Debit Accounts Payable, Credit Cash

25.

What does GAAP stand for

a)

Good Apples Are Perfect

b)

Grandmas Are Always Punctual

c)

General Accepted Accounting Principals

d)

General Art Are Pleasant

26.

A ​ (a)   handles a broad range of responsibilities, makes business decisions, and prepares and

interprets financial reports.

Choose from the below words
Accountant
Manager
Principal
Logistics Engineer
27.

A ​ (a)   ​ business operates to

earn money for their owners.

Choose from the below words
For-Profit
Non-Profit
Charity
Football Team
28.

CPA stands for

a)

Certified Personal Accountant

b)

Certified People Audit

c)

Care Professional Animal

d)

Careful Personal Accountant

29.

The Accounting Equation

​ (a)   = ​ (b)   + ​ (c)  

Choose from the below words
Assets
Liabilities
Equity
Money
30.

The stuff the business ​ (a)   is equal to the stuff the business ​ (b)  

Choose from the below words
Owns
Owes
Buys
Sells
31.

Loans, Taxes, Wages owed, etc are a ​ (a)  

Choose from the below words
Liability
Asset
Equity
32.

The Balance Sheet must ​ (a)   balance

Choose from the below words
ALWAYS
Sometimes
not necessarily
RARELY
33.

One objective of Accounting is to depict the ​ (a)   position of the company

Choose from the below words
Financial
Location
Image
SocialStatus
34.

What does the acronym DEALER stand for in accounting?

a)

Debits, Expenses, Assets, Liabilities, Equity, Revenue

b)

Dividends, Expenses, Assets, Liabilities, Equity, Revenue

c)

Debits, Expenses, Assets, Liabilities, Equity, Retained Earnings

d)

Dividends, Expenses, Assets, Liabilities, Equity, Retained Earnings

35.

Which accounts are considered debit accounts in accounting?

a)

Dividends, Expenses, Assets

b)

Liabilities, Equity, Revenue

c)

Dividends, Expenses, Revenue

d)

Assets, Liabilities, Equity

36.

What happens to the balances of debit accounts when debits are recorded?

a)

They increase

b)

They decrease

c)

They stay the same

d)

It depends on the account type

37.

Which accounts are considered credit accounts in accounting?

a)

Dividends, Expenses, Assets

b)

Liabilities, Equity, Revenue

c)

Dividends, Expenses, Revenue

d)

Assets, Liabilities, Equity

38.

What do credits represent in accounting?

a)

The sources that economic benefit can flow from

b)

The destinations that economic benefit can flow to

c)

The changes in account balances

d)

The transactions recorded in the general ledger

39.

What do debits represent in accounting?

a)

The sources that economic benefit can flow from

b)

The destinations that economic benefit can flow to

c)

The changes in account balances

d)

The transactions recorded in the general ledger

40.

Which account is debited when the owner of a car wash provides their company with a $1,000 initial investment?

a)

Cash

b)

Owner's Equity

c)

Accounts Payable

d)

Revenue

41.

Liability account increases, that is a ​ (a)  

Choose from the below words
Credit
Debit
42.

An assets decrease when the account is ​ (a)  

Choose from the below words
Credited
Debited
43.

Resources owned by a company that can be measured and expressed in dollars

a)

Debit

b)

Liabilities

c)

Asset

d)

Revenue

44.

Any account with the word "Payable" at the end is called a(n)__________

a)

Asset

b)

Revenue

c)

Liability

d)

Equity

45.
The financial statement that reports the revenues and expenses for a period of time such as a year or a month is the:
a)
Balance Sheet
b)
Income Statement
c)
Statement of Cash Flows
d)
None of These
46.
The financial statement that reports the assets, liabilities, and stockholders' (owner's) equity at a specific date is the:
a)
Balance Sheet
b)
Income Statement
c)
Statement of Cash Flows
d)
Cash Statement
47.
Under the accrual basis of accounting, revenues are reported in the accounting period when the:
a)
Cash is Received
b)
Service or Goods Have Been Delivered
c)
End of the Month Has Arrived
d)
Customer Pays
48.
Resources owned by a company (such as cash, accounts receivable, vehicles) are reported on the balance sheet and are referred to as __________.
a)
Assets
b)
Liabilities
c)
Owner Equity
d)
Equity
49.
Obligations (amounts owed) are reported on the balance sheet and are referred to as __________.
a)
Assets
b)
Liabilities
c)
Debt
d)
Owner Equity
50.
Liabilities often have the word __________ in their account title.
a)
Assets
b)
Payable
c)
Paid
d)
Equity
51.
Accounting entries involve a minimum of how many accounts?
a)
One
b)
Two
c)
Three
d)
Four
52.
The listing of all of the accounts available for use in a company's accounting system is known as the __________.
a)
Chart of Accounts
b)
Journal
c)
Ledger
d)
Credit Ledger
53.
Under the accrual basis of accounting, expenses are reported in the accounting period when the
a)
Cash is Paid
b)
Expense Matches the Revenues or is Used up
54.
Revenues minus expenses equals:
a)
Assets
b)
Liabilities
c)
Owner Equity
d)
Net Income
55.
Assets 
a)
Anything owed by the company
b)
Anything owned of value by the company
56.
The owner's worth after assets are used to pay all liabilities is the definition of
a)
Owner's Equity
b)
Liabilities
c)
Assets
57.
Paid Cash means cash has:
a)
Decreased
b)
Increased
58.
Bought supplies on account means Supplies has increased and what other account has changed?
a)
Cash has decreased
b)
Account Payable has increased
59.
Assets taken out of a business for the owner's personal use
a)
capital
b)
withdrawals
c)
equities
d)
revenue
60.
Planning, recording, analyzing, and interpreting financial information
a)
accounting
b)
ethics
c)
transaction
d)
revenue
61.
A decrease in owner's equity resulting from the operation of a business
a)
account
b)
capital
c)
asset
d)
expense
62.
Amount owed by a business
a)
liability
b)
asset
c)
capital
d)
account
63.
A business activity that changes assets, liabilities, or owner's equity
a)
transaction
b)
expense
c)
revenue
d)
sale on account
64.
Anything of value that is owned
a)
account
b)
asset
c)
withdrawal
d)
expense
65.
A business owned by one person
a)
service business
b)
revenue
c)
expense
d)

sole proprietorship

66.

What is the purpose of an income statement?

a)

calculate the bank balance

b)

calculate net assets

c)

calculate sales

d)

calculate net profit

67.

Net Profit = 500

Revenue = 2000

Expenses = 1000

Cost of Goods Sold = ?

a)

1500

b)

1000

c)

3000

d)

500

68.

Revenue = 1000

Cost of Goods Sold = 200

Expenses = 300

Net Profit = ?

a)

800

b)

500

c)

700

d)

300

69.

Revenue = 1000

Cost of Goods Sold = 200

Expenses = 300

Gross Profit = ?

a)

800

b)

500

c)

700

d)

300

70.

Any money made from the sale of the business’s goods and services

a)

Creditors

b)

Categories

c)

Managers

d)

Revenue

71.
Examples may include salaries, utilities, rent, insurance, and office supplies.
a)
Revenue
b)
Expense
c)
Net Income
d)
Net Loss
72.

Match the following

a)

Assets

1.

anything of value owned by the business

b)

Liabilities

2.

money owed by the business

c)

Owner's Equity

3.

the rights to the assets of the business

73.

Find the missing amount:

Assets =

Liabilities = -200

Owner Equity = 700

a)

850

b)

900

c)

500

d)

1000

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