Accounting knowledge MCQs

These Accounting knowledge multiple-choice questions and their answers will help you strengthen your grip on the subject of Accounting knowledge. You can prepare for an upcoming exam or job interview with these 90+ Accounting knowledge MCQs.
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If you were looking at the balance sheet, what value would the inventory account be shown at?

A. Sales value

B. Cost value

C. "Whatever value the company finds most convenient to use "

D. None of the above

A. Raw materials

B. Cost of goods sold

C. Work in process

D. Finished goods

Who pays the shipping costs in a FOB destination situation?

A. Seller

B. Buyer

C. Third party

D. None of the above

If you were at a grocery store and saw an employee moving the oldest food items to the front and stocking the newer items in the back, what inventory cost flow assumption are they most likely using?

A. FIFO

B. LIFO

C. Specific Identification Method

D. Weighted Average

E. None of the above

What financial statement would you request to view the cost of goods sold balance?

A. Statement of Changes in Equity

B. Balance Sheet

C. Income Statement

D. Statement of Cash Flows

E. None of the above

On the balance sheet, inventory is reported as a _____ (check all that apply).

A. Current liability

B. Current asset

C. Noncurrent liability

D. Noncurrent asset

For a for profit entity, assets = liabilities + _____.

A. Revenues

B. Owner's equity

C. Net Assets

D. Expenses

An employee completes a _____ form to show their exemptions/dependents they need withheld for income tax purposes.

A. I-9

B. W-2

C. W-4

D. SF-181

Sales analysis is beneficial for a __ entity.

A. For profit

B. Not for profit

C. All of the above

D. None of the above

10:

The employer pays the ____ tax which is 0.06% taken from the first $7,000 of each employee's annual income.

A. Worker's compensation

B. Social security

C. Medicare

D. None of the above

11:

Who contributes to FICA (check all that apply)?

A. Employee

B. Employer

C. IRS

D. Both A and B

E. All of the above

12:

__ is a list of the company's accounts, whether they contain a balance or not (check all that apply).

A. T-account

B. General ledger

C. Chart of accounts

D. Balance Sheet

13:

Typically, what is a not for profit entities main source of revenue?

A. Services rendered

B. Grants/contributions

C. Goods sold

D. None of the above

14:

If a company returned goods to their vendor, would accounts payable be debited or credited?

A. Debited

B. Credited

C. All of the above

D. None of the above

15:

What is a general ledger?

A. A bookkeeping area in which accounts, sales, and purchases are kept together

B. A record of all transactions

C. A book of all finances

D. All of the Above

16:

Which of the following are liability accounts? (check all that apply)

A. Accrued expenses

B. Customer deposits

C. Equipment

D. Insurance Expense

E. Notes Payable

17:

An employee completes a _____ form to verify their identity and employment eligibility.

A. I-9

B. W-2

C. W-4

D. SF-181

18:

Accounts receivable is often referred to as buying on _____ (check all that apply).

A. Debt

B. Credit

C. Account

D. None of the above

19:

For a not for profit entity, the Statement of cash flows can be prepared using what method?

A. Indirect

B. Direct

C. All of the above

D. None of the above

20:

For a not for profit entity, what financial statement would you request to view their assets and liabilities?

A. Statement of Financial Position

B. Statement of Activity

C. Statement of Cash Flow

D. Statement of Functional Expenses

21:

For a not for profit entity, assets = liabilities + __.

A. Revenues

B. Owner's equity

C. Net Assets

D. Expenses

22:

What does FICA refer to (check all that apply)?

A. Medicare tax

B. Social Security tax

C. Unemployment tax

D. None of the above

23:

Check all of the following subgroups that sales analysis could be broken down into (check all that apply):

A. Sales by region

B. Sales by product

C. Sales by customer

D. Sales by demographic

24:

What is the amount that an employee actually receives before taxes and all withholdings on their check referred to as (check all that apply)?

A. Gross

B. Net

C. Difference

D. None of the above

25:

_____ is permitted financing for a not for profit entity.

A. Sale of equity securities

B. Debt

C. All of the above

D. None of the above

26:

Hourly paid employee's pay is usually referred to as _____.

A. Salary

B. Wages

C. Contribution

D. None of the above

27:

An example of a court ordered withholding is ____ (check all that apply).

A. Union dues

B. Child support

C. Insurance premiums

D. All of the above

E. None of the above

28:

On the balance sheet, prepaid insurance could be reported as a _____ (check all that apply).

A. Current liability

B. Current asset

C. Noncurrent liability

D. Noncurrent asset

29:

For a not for profit entity, what financial statement would you request to see to view their revenues and expenses?

A. Statement of Financial Position

B. Statement of Activity

C. Statement of Cash Flow

D. Statement of Functional Expenses

A. Bad debt expense

B. Allowance for doubtful accounts

C. Sales returns and allowances

D. None of the above

31:

At what point does accrual based accounting recognize revenue?

A. When the money is collected

B. When the contract is signed

C. When the goods are delievered/service is completed

D. All of the above

E. None of the above

A. Unemployment

B. Worker's compensation

C. Medicare

D. Social Security

E. None of the above

33:

The amount of FICA that would be withheld in 2016 on an employee's salary of $45,000 would be _____ (rounded to the nearest dollar).

A. $653

B. $2,790

C. $3,443

D. $6,885

34:

What is a common name used for suppliers?

A. Salesmen

B. Marketers

C. Vendors

D. Dealers

35:

What is the FICA percentage withheld from gross wages up to $118,500 for 2016?

A. 1.45%

B. 6.20%

C. 7.65%

D. None of the above

36:

Should the accounts payable balance be decreased by a credit or debit?

A. Debit

B. Credit

C. All of the above

D. None of the above

37:

How many accounts can be affected in a single journal entry?

A. Zero

B. Only one

C. Only two

D. Two or more

38:

At what point does the buyer have ownership of the goods in a FOB destination situation (check all that apply)?

A. Seller's warehouse

B. Seller's shipping dock

C. Seller's delivery truck

D. None of the above

39:

What type of balance can a contra account have?

A. Credit

B. Debit

C. Zero

D. All of the above

40:

What ratio would accounts payable be found in?

A. Gross margin ratio

B. Current ratio

C. Return on assets

D. All of the above

41:

You would find the allowance for bad debt account on the __ (check all that apply).

A. Balance Sheet

B. Statement of Cash Flows

C. Statement of Changes in Equity

D. Income Statement

42:

What financial statement would you request to see if you wanted to look into a company’s revenues and expenses for a specific period of time?

A. Balance Sheet

B. Statement of Cash Flows

C. Statement of Changes in Equity

D. Income Statement

43:

When you issue an invoice that states "2/10, net 30" what period does the 10 stand for?

A. Payment

B. Coupon

C. Discount

D. None of the above

44:

What discount amount would be received for an invoice for $5,000 that states “2/10, net 30” if you paid within 8 days?

A. $0

B. $50

C. $100

D. $150

E. None of the above

45:

What are the main objectives of using sales analysis? (check all that apply)

A. Find market opportunities

B. Decrease expenses

C. Increase revenues

D. Discover product demand

E. All of the above

46:

BYX sold and delivered $50,000 worth of goods to customer A, who agreed to Cash n/30 terms. The cost to manufacture the goods was $10,000. Which of the accounts will be increased as a result of this transaction? (check all that apply)

A. Accounts Payable

B. Cost of Goods Sold

C. Revenue

D. Retained Earnings

47:

Home Refurbishing, Inc. provides a 25% trade discount on a list price of $5,000. Which of the following amounts is the correct way to record the sale?

A. $1,250

B. $3,750

C. $5,000

D. $6,250

48:

BYX has a retail subsidiary that sells sporting goods equipment. On May 15th, BYX sporting goods had credit card sales totaling $1,000. The credit card company charges a 2.75% fee for the daily total transactions. The sales tax rate is 8%. Which of the following is the correct transaction analysis?

A. DR: Cash, DR: Credit Card Expense; CR: Deferred Sales Tax, CR: Cost of Goods Sold

B. DR: Cash, DR: Credit Card Expense; CR: Sales Tax Payable, CR: Sales

C. DR: Cash, DR: Credit Card Expense; CR: Accrued Expenses Payable, CR: Sales

D. DR: Accounts Receivable, DR: Credit Card Expense; CR: Sales Tax Payable, CR: Cost of Goods Sold

49:

What inventory cost flow assumption is banned by International Reporting Standards (IFRS) but can still be used under Generally Accepted Accounting Principles (GAAP)?

A. FIFO

B. LIFO

C. Specific Identification Method

D. Weighted Average

E. None of the above

50:

How is the general journal information organized?

A. Date order

B. Transaction amount order (from highest to lowest)

C. Alphabetical order

D. Account order

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