NEW
Font size
WorksheetsBookkeeping Multiple Choice Questions
Total questions: 49
Worksheet time: 25mins
The accounting equation must remain in balance
At some other point in the accounting cycle.
Only when formal financial statements are prepared
Only when journal entries are recorded.
At all times.
Which of the following are subjected to strict regulations?
Sole Proprietorship
Corporations
partnerships
none of the above
Business operation that involves purchasing and converting raw materials into finished product.
sole proprietorship
Cooperative
merchandising business
Manufacturing business.
The double entry accounting system means
Each transaction is recorded with two journal entries.
Each item is recorded in a journal entry and then in a general ledger account.
The dual effect of each transaction is recorded with a debit and a credit.
All of these describe the double entry system.
In recording transactions
The word “debit” means increase and the word “credit” means decrease
Assets, expenses, and drawing accounts are debited for increases
Liabilities, revenue, and drawing accounts are debited for increases
Assets, expenses, and capital accounts are debited for increases.
The debit and credit analysis of a transaction normally takes place
Before an entry is recorded in a journal.
When the entry is posted to the ledger
Only when journal entries are recorded.
Only at the time the trial balance is prepared.
Which of the following events increases cash balance?
Bank not granting loan
Debtors paying the company
Loan repayment to creditors
Sale of stock on account
Which of the following reduce cash balances?
Purchase of fixed assets
Acquired assets on credit
Purchase of stock on account
Creditors grant loan.
A chart of Account begins with-
Owners’ equity
assets
Liabilities
expense
Assets to be sold, consumed or realized as part of the normal operating cycle are
Current assets
Noncurrent assets
Classified as current and noncurrent in accordance with other criteria
Noncurrent investments
The correct order to present current assets is
Cash, accounts receivable, prepaid items, inventories.
Cash, accounts receivable, inventories, prepaid items.
Cash, inventories, accounts receivable, prepaid items.
Cash, inventories, prepaid items, accounts receivable
Are resources controlled by the enterprise as a result of past transaction and events and from which future economic benefits are expected to flow the enterprise.
Liabilities
Assets
expenses
owners' equity
An asset which includes bills and cash on hand, bank accounts, and operating funds is called
Cash
Trade Receivables
Inventories
Biological Asset
An example of non-current asset
Inventories
Cash
Property, Plant and Equipment
Income tax payable
Merchandise inventory becomes part of the cost of goods sold when a company
Pays the inventory
receives the payment from the customer
Purchases the inventory
sells the inventory
It refers to cost of goods unsold at the end of the accounting period
Official receipt
Merchandise inventory, end
debit memorandum
Credit period
Exception of depreciable assets which are subject to depreciation is-
Building
land
Furniture and fixtures
equipment
Liabilities that an entity expects to settle within the normal operating cycle are classified as
Noncurrent liabilities
Current liabilities
Temporary liabilities
Equity
Which of the following accounts is a current liability?
Trade receivables
Inventories
Trade payables
Machines
Which of the following transactions would increase cash as well as non-current liabilities?
Long term bank loan
Purchasing equipment on credit
Payment to suppliers
Payment from customers
This liability is related to notes payable, and is cost for borrowing money.
Other Accrued Expenses
Interest Payable
Notes payable
bonds payable
Nominal accounts are also called
Temporary accounts
Permanent accounts
Real accounts
Mixed accounts
Which of the following is a nominal account?
Unearned revenue
Retained earnings
Salary expense
Inventory
The income statement reveals -
resources and equities of a firm at a point in time
resources and equities of a firm for a period of time.
net earnings (net income) of a firm for a period of time
net earnings (net income) of a firm for a point in time
This financial statement that informs the reader about the performance and activities of the company for a certain period.
Statement of Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
The Statement of Financial Position is also referred as the:
Balance Sheet
Income Statement
Statement of Changes in Financial Position
A financial statement which directly relates to the measurements of financial position of an enterprise as of a given date.
Statement of Financial Position
Income statement
statement of changes in equity
Statement of Current Affairs
Which of the following is not a category of cash flows required to be shown on the statement of cash flows?
Cash flows from operating activities
Cash flows from financing activities
Cash flows from taxation
Cash flows from investing activities
Which of the following is categorized as a cash from investing activities?
Increase in inventories
Proceed of a loan
Proceed from a sale of PPE
Dividends paid
Which of the following is a cash flow from financing activities?
Cash payments to acquire intangible assets
Cash receipts from sale of tangible assets
Cash payment to acquire PPE
Dividends paid
An accounting cycle is a series of recurring steps that usually starts with:
Analyzing business transactions from source documents
Preparing chart of accounts
Journalizing the business transaction
Preparing a trial balance
It is the process of recording the business transaction in a chronological order in the book of original entry.
Journalizing
Posting
Transferring
Analyzing
The book of original entry is also known as:
Subsidiary ledger
Trial balance
General ledger
Journal
A general journal:
Chronologically lists transactions and other events expressed in terms of debit and credit.
Contains one record for each of the asset, liability, equity, revenue and expense.
List all the increases and decreases in each account in one place.
Contains only adjusting entries.
List of account balances that are arranged from asset down to the last item of expense accounts.
Chart of accounts
Flow chart
trial balance
general ledger
What functions do general ledger served in the accounting process?
Summarizing
Classifying
interpreting
All of these
All description reveal the characteristics of periodic inventory system, except:
Cost of goods sold is determined at the end of the reporting period
Purchases are recorded at cost
Inventory is always up to date
Merchandise inventory account is set up at the beginning and ending of accounting period.
Which of the following is considered as an operating expense?
Administrative cost
Freight in
Advertising expense
freight out
Under the perpetual inventory system, which of the following accounts would not be used?
Cost of goods sold
purchases
Merchandise inventory
Sales
Which of the following is not considered in computing net purchases?
Purchases
Transportation paid on goods shipped to the customers
Credit at
Debit at
Which of the following documents is the primary source used to record a business’s cash disbursements?
Sales invoice.
Purchase order.
Check voucher.
Delivery receipt.
Petty cash fund is
Separately classified as current assets.
Money kept on hand for making minor disbursements of coin and currency rather than by writing checks.
Set aside for the payment of payroll.
Restricted cash.
The internal control feature specific to petty cash is
Separation of duties
Assignment of responsibility
Proper authorization
Imprest system
What is the primary purpose of internal controls?
To eliminate errors
To prevent fraud
To ensure accuracy in financial reporting
To increase operational efficiency
Which of the following is an example of a control activity?
Segregation of duties
Risk assessment
Management oversight
Information sharing
Who is primarily responsible for an organization’s internal control system?
External auditors
Management
Employees
Government regulators
What is the primary purpose of segregation of duties?
To reduce operational errors
To prevent unauthorized access
To increase productivity
To reduce fraud and errors by dividing responsibilities
What is the primary goal of effective workplace communication?
To delegate tasks
To resolve conflicts
To ensure understanding and collaboration
To promote leadership
Which communication method is typically best for delivering complex or sensitive information?
Text message
Face-to-face meeting
Company memo
