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WorksheetsTest 5: Review
Total questions: 54
Worksheet time: 27mins
Which of the following would most likely make a business choose a vendor with a higher price?
Longer delivery time
Consistent on-time delivery
Unverified quality standards
Limited product options
Explain how a late vendor delivery could impact a business’s operations and customer satisfaction.
A late vendor delivery could delay production or sales, leading to dissatisfied customers and potential loss of business.
A late vendor delivery always results in increased profits for the business.
A late vendor delivery has no effect on customer satisfaction or business operations.
A late vendor delivery guarantees faster production and happier customers.
Select the supplier you should choose and explain why.
Supplier A, because they offer the best price and quality.
Supplier B, because they have the fastest delivery time.
Supplier C, because they provide the largest variety of products.
Supplier D, because they have the highest customer ratings.
It’s always best to select the vendor who offers the lowest price. (Explain your answer.)
True
False
Match the following terms with their meanings:
A price estimate for goods or services
Quote
Ensuring products meet certain standards
Quality assurance
Inventory level at which new stock should be ordered
Reorder point
Conditions regarding the delivery of goods
Delivery terms
Which factor is least important when choosing a vendor?
Product reliability
Delivery schedule
Vendor’s popularity among your friends
Payment terms
Which financial statement tells whether a business earned a profit or suffered a loss?
Cash Flow Statement
Balance Sheet
Income Statement
Owner’s Equity Report
The accounting equation states that: ________ = Liabilities + Owner’s Equity.
Assets
Revenue
Expenses
Cash
Explain why the breakeven point is important for a new entrepreneur.
It helps determine when the business will start making a profit.
It shows the total amount of money invested in the business.
It identifies the number of employees needed for success.
It predicts future market trends for the business.
Have you reached the breakeven point? Why or why not?
Yes, because total revenue equals total costs.
No, because total costs are higher than total revenue.
No, because total revenue is higher than total costs.
Yes, because total costs are higher than total revenue.
Which financial statement shows a company’s assets and debts at one point in time?
Income Statement
Cash Flow Statement
Balance Sheet
Revenue Report
Cash Flow Statements track how much money a company owes to others.
True
False
If your total sales are 10,000andyourvariablecostsare 6,000, what is your contribution margin?
4,000
6,000
16,000
10,000
Under which accounting method is revenue recorded when earned, not when cash is received?
Cash basis
Accrual basis
Hybrid method
Credit method
A business using cash accounting would record a sale the day the customer makes the purchase, even if payment is due later.
True
False
The main purpose of keeping a subsidiary ledger is:
to provide detailed information about individual accounts
to summarize all financial transactions
to eliminate the need for a general ledger
to record only cash transactions
Scenario: A business sells $500 in goods on credit. Which method—cash or accrual—records this sale immediately, and why?
The accrual method records the sale immediately because it recognizes revenue when earned, not when cash is received.
The cash method records the sale immediately because it recognizes revenue when cash is received.
Both methods record the sale immediately because revenue is always recognized at the time of sale.
Neither method records the sale immediately because revenue is recognized only when payment is received.
Match the term to its definition:
Journal
A record of all transactions
General Ledger
A complete record of all financial transactions over the life of a company
Subsidiary Ledger
A ledger providing details for a specific account
Aging Table
A table showing unpaid customer balances and how long they have been outstanding
What is the main reason to use an aging table in accounting?
To track inventory levels
To monitor unpaid customer balances
To calculate total revenue
To record payroll expenses
One advantage of using the accrual method over the cash method for financial planning is:
It provides a more accurate picture of financial position.
It only records transactions when cash is received or paid.
It ignores accounts receivable and payable.
It is simpler and easier to use than the accrual method.
Why is reconciling a bank statement important?
To find your account number
To make sure bank and personal records match
To pay outstanding checks
To avoid future deposits
If you discover a $15 service fee on your bank statement that isn’t in your check register, what should you do?
Add the $15 service fee to your check register.
Ignore the fee since it is not in your check register.
Dispute the fee with your bank immediately.
Remove $15 from your account balance.
Bank reconciliation should only be done at the end of the year.
True
False
Scenario: You notice a deposit of $250 missing from your register but shown on your bank statement. What should you do?
Report the discrepancy to your supervisor or manager immediately.
Ignore the issue since the bank statement shows the deposit.
Remove $250 from the register to match the bank statement.
Wait to see if the register updates automatically.
Which of the following is an example of an outstanding check?
A check you wrote but hasn’t cleared the bank yet
A deposit that was processed immediately
A fee charged by the bank
An automatic payment for rent
Reconciling your bank account can help detect which of the following?
Fraud or errors
Interest rate changes
Loan approvals
Account closure
Match each term with its meaning:
Outstanding check
A check you wrote but hasn’t cleared the bank yet
Bank service charge
A fee charged by the bank
Deposit in transit
A deposit that hasn’t cleared the bank yet
Reconciliation
Comparing your records to the bank statement to ensure they match
Which is the best reason to choose a higher-priced vendor?
Lower cost
Consistent on-time delivery
More popular
What is the impact of late delivery from a vendor?
Causes stockouts, delays sales, frustrates customers, reduces trust.
Improves inventory levels and customer satisfaction.
Speeds up production and increases profits.
Reduces the need for communication with suppliers.
In a smoothie shop scenario, what is the best supplier choice?
Choose reliable supplier (on-time delivery).
Choose supplier with highest prices.
Choose supplier with slow delivery.
Choose supplier with limited product range.
The lowest price is always the best factor when choosing a vendor.
True
False
Match the terms:
Price quote
Price quote
Assurance that product meets standards
Assurance that product meets standards
Stock level triggering reorder
Stock level triggering reorder
Agreement on shipping/timing
Agreement on shipping/timing
Which is the least important vendor factor?
Price
Delivery reliability
Vendor’s popularity among your friends
Statement showing profit/loss. Shows revenue and expenses.
Balance Sheet
Cash Flow Statement
Income Statement
Fill in blank (accounting equation): Assets = ________ + Owner’s Equity.
Liabilities
Revenue
Expenses
Drawings
Importance of breakeven point. Helps determine sales target for profitability.
Helps determine sales target for profitability.
Shows the total assets of a company.
Indicates the market share of a product.
Measures employee satisfaction.
Breakeven scenario. Revenue = Expenses, so no profit/loss. Is there profit at breakeven?
Yes, there is profit at breakeven.
No, there is no profit at breakeven.
Profit is always negative at breakeven.
Profit is always positive at breakeven.
Statement showing assets/debts. Snapshot of what business owns/owes.
Income Statement
Cash Flow Statement
Balance Sheet
Cash Flow tracks debt. It tracks money movement (inflows/outflows), not debts.
True
False
Contribution margin calculation: 10,000– 6,000 = ________. This margin covers fixed costs and profit.
$4,000
$6,000
$10,000
$2,000
Revenue under accrual method. Records when earned, regardless of payment.
Cash basis
Accrual basis
Cash method records immediately. Cash method records when payment is received, not when sale occurs.
True
False
Purpose of subsidiary ledger.
To provide detailed information about individual accounts within the general ledger.
To record only cash transactions.
To summarize all financial statements.
To replace the general ledger entirely.
$500 sale on credit. Accrual method records revenue when earned, even if not yet paid.
Revenue is recorded when earned, even if not yet paid.
Revenue is recorded only when cash is received.
Revenue is not recorded for credit sales.
Revenue is recorded when expenses are paid.
Matching terms:
Chronological transaction record
A
Main account summary
B
Detailed account breakdown
C
List of unpaid balances by age
D
Purpose of aging table.
To analyze outstanding receivables based on their age.
To calculate company profits.
To track employee attendance.
To manage inventory levels.
Advantage of accrual method.
Recognizes revenue and expenses when they are incurred, not when cash is exchanged.
Records transactions only when cash is received or paid.
Ignores outstanding expenses and revenues.
Is less accurate for financial reporting.
Importance of reconciliation.
It helps ensure accuracy and prevents fraud.
It increases unnecessary paperwork.
It delays financial reporting.
It reduces transparency in records.
Service fee adjustment. Record $15 withdrawal in check register to match statement.
Record $15 withdrawal
Record $20 withdrawal
Record $10 deposit
Record $15 deposit
You should reconcile your bank account yearly.
True
False
What should you do if you notice a missing $250 deposit on your bank statement?
Add deposit to check register.
Ignore the missing deposit.
Withdraw $250 from your account.
Report the deposit as income to the IRS.
Which of the following best describes an outstanding check?
Check written but not yet cleared.
Check deposited but not yet credited.
Check cleared and posted to account.
What does reconciliation expose between bank and business records?
Reconciliation exposes unauthorized withdrawals or mistakes.
Reconciliation exposes profit margins.
Reconciliation exposes future investments.
Reconciliation exposes employee performance.
Match the following terms:
Check not cleared
Check not cleared
Bank charge for service
Bank charge for service
Deposit not yet cleared
Deposit not yet cleared
Process comparing records to bank statement.
Process comparing records to bank statement.
