Accounting Trivia Questions

Answer: balance sheet

Petty Cash can be found on a balance sheet, which consists of the assets, liabilities, and some of the equity accounts that a business has. Petty Cash is an asset account that consists of a small amount of cash that is used when writing a check would not make sense.

Answer: Intangible Asset

Non-current assets are the assets not realized in one year after the balance sheet date or within the entity's operating cycle. Though intangible assets are also part of fixed assets, they should be distinguished from tangible assets like plant, property and equipment. Other intangible assets include franchises, licences, trademarks, and secret processes.

Answer: programmer

The systems analyst designs the computer system, the programmer writes the programs that directs the computer's actions, and the computer operator runs the computer.

Answer: Accrued Expense

Accrued expenses include unpaid salaries for employees. For example, if you worked a summer job, then you know that there may be an interval of several days or even a week between the end of your pay period and the date that you receive your paycheck. If an accounting period ends during such an interval, then your employer's salary expense would be accrued for the salary you have earned but have not yet been paid. Prepaid expenses are expenses that are paid in advance. Unearned revenue occurs when cash is received from a customer before work is performed. Accrued revenues have been earned, but payment in cash has not been received.

Answer: Net Loss

You'd have a loss because you've lost money in that period of time and it would be a net meaning overall during the accounting period.

Answer: Variable cost

Variable costs start at zero when no units are produced and change with the number of units produced.

Answer: Sales a/c

Goods are leaving the business so it is credited. It is written as sales to avoid confusion between sales and purchase returns.

Answer: Debit Cash for $120,000 and Credit Deferred Revenue for $120,000

Although cash is received in December, Julia will not be providing services until the following year. Thus, it is most appropriate to record a liability on the balance sheet for deferred revenue instead of actual revenue in December. This revenue will be recorded the following year.

Answer: Generally Accepted Accounting Principles

These are the principles that govern the form and format of accounting.

Answer: Assets = Liabilities + Equity

The expanded accounting equation is Assets= Liabilities + Equity + (Revenue-Expenses). Assets are the resources controlled by company while liabilities (bonds)and equity (stocks) are the elements needed to finance those assets.

Answer: systems analyst

Systems analysts are the personnel who designs the computer systems.

Answer: invoice

When a merchandiser decides to purchase an inventory, it sends a purchase order to its supplier. The supplier ships the merchandise and sends an invoice, or bill, to the merchandiser. The merchandiser pays the supplier in accordance with the supply/credit terms, e.g. cash on delivery, 7 days after delivery, 30 days from end of month, etc.

Answer: turnover

Debtor days are difficult for businesses to deal with. If they don't give enough time for debtors to pay them, then debtors may look elsewhere for better deals, but if they give them too much time then the company may experience cash flow problems.

Answer: Time Period Principle

Accounting statements can be made on period of time such as monthly, annually, semi-annually etc. Every time a statement is made it should be made on the same duration of time each time to follow the time period principle.

Answer: Fixed cost

A cost that remains the same (or, in practice, very nearly the same) across a range of units of product produced (the relevant range) is said to be a fixed cost. This is often the case for insurance premiums, executive compensation, and similar costs.

Answer: Bank a/c

Cheque makes it very detailed. It is always written as bank a/c.

Answer: Nominal Account

It includes salaries, rent, discounts, etc.

Answer: Debtors

Debtors are people or other businesses that have to pay you for something. A loan or anyone who has purchased goods on credit are two examples.

Answer: Record as legal expense on her income statement

According to Statement of Position 98-5 (AICPA) these costs should be expensed.

Answer: Not-for-profit accounting

Public accounting is when accounting services are offered to the general public; Cost accounting is part of managerial accounting. (Accounting Principles, Canadian Edition, volume 1, by Weygandt, Kieso, and Trenholm, page 8).

Answer: Latin, debere and credere

Accounting has been around for a long time :)

Answer: capital

In accounting, the term "capital" is used to describe the initial investment required to get the business started and thus generate income. "Collateral" is also a valid answer.

Answer: receipt

The appropriate source document would be a receipt, a type of written acknowledgment that money has been exchanged for goods or services.