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Accounting #1 Trivia Quiz

I thought I would make a quiz about accounting, since I have been taking accounting classes all summer. Good luck to anyone who actually plays this, and remember that I am Canadian, so this is Canadian accounting.

A multiple-choice quiz by jdrr22. Estimated time: 5 mins.

Author
jdrr22

Time
5 mins

Type
Multiple Choice

Quiz #
86,935

Updated
Jan 25 23

# Qns
10

Difficulty
Tough

Avg Score
6 / 10

Plays
5579

One at a Time - Single Page - Timed Game

Question 1 of 10

1. Accounting is the process of identifying, recording, and communicating the economic events of an organization to the user of the information. True or False?

True

False

NEXT>

Question 2 of 10

2. A primary user of accounting information with a direct financial interest in the business is a...? Hint

labour union

regulatory agency

taxing authority

director

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Question 3 of 10

3. If net credit sales are $100,000 and average net accounts receivable are $10,000, then the receivables turnover ratio is 10%. True or false?

True

False

NEXT>

Question 4 of 10

4. Accounting for government, foundations, hospitals, labour unions, colleges/universities, and charities is part of which broad category within the accounting profession? Hint

Management consulting

Cost accounting

Public accounting

Not-for-profit accounting

5. Prior to the recording of adjusting entries, revenues exceed expenses by $60,000. Adjusting entries for accrued wages of $5,000 and an amortization expense of $5,000 were made. Net income for the year would be? Hint

$60,000

none of these

$55,000

$50,000

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Question 6 of 10

6. Assets are increased by debits and liabilities are decreased by credits. True or false?

True

False

NEXT>

Question 7 of 10

7. The duties of receiving cash, recording cash receipts transactions, and having custody of cash should be assigned to a single capable individual. True or false?

True

False

NEXT>

Question 8 of 10

8. The proper sequence for the accounting cycle is? Hint

Post, journalize, analyze, prepare statements, close, adjust

Analyze, journalize, post, adjust, prepare statements, close

Prepare statements, journalize, post, adjust, close, analyze

Journalize, post, close, prepare statements, adjust, analyze

NEXT>

Question 9 of 10

9. The adjustment for amortization is an example of? Hint

Recognizing an accrued expense

Apportioning costs between two or more periods

Apportioning revenues between two or more periods

Recognizing an unrecorded revenue

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Question 10 of 10

10. A $100 petty cash fund has cash of $21 and valid receipts for $80. The journal entry upon replenishment would include a...? Hint

Credit to Cash for $80

Debit to Cash Over and Short for $1

Debit to Cash for $80

Credit to Cash Over and Short for $1

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Quiz Answer Key and Fun Facts

1. Accounting is the process of identifying, recording, and communicating the economic events of an organization to the user of the information. True or False?

Answer: True

Identifying, recording and communicating are the three activities that make up the accounting process. To be clearer, this means identifying the economic events, keeping a record of those events, and communicating the information collected through the use of financial statements. (Accounting Principles, Canadian Edition, volume 1, by Weygandt, Kieso, and Trenholm, page 2).

2. A primary user of accounting information with a direct financial interest in the business is a...?

Answer: director

Taxing authorities, regulatory agencies, and labour unions are all considered to have an indirect financial interest in a business, so they are external users of accounting information. Directors have a direct financial interest in a business, so they are internal/primary users of accounting information. (Accounting Principles, Canadian Edition, volume 1, by Weygandt, Kieso, and Trenholm, page 3).

3. If net credit sales are $100,000 and average net accounts receivable are $10,000, then the receivables turnover ratio is 10%. True or false?

Answer: False

The receivables turnover ratio is calculated as follows: Net Credit Sales divided by average Accounts Receivable = Receivables Turnover.
(Accounting Principles, Canadian Edition, volume 1, by Weygandt, Kieso, and Trenholm, page 351). So, $100,000 divided by $10,000 = 10 times, not 10%.

4. Accounting for government, foundations, hospitals, labour unions, colleges/universities, and charities is part of which broad category within the accounting profession?

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: $50,000

Net income is calculated as follows: Revenues - Expenses = Net income. So, $60,000 - $5,000 - $5,000 = $50,000. (Accounting Principles, Canadian Edition, volume 1, by Weygandt, Kieso, and Trenholm, page 16).

6. Assets are increased by debits and liabilities are decreased by credits. True or false?

Answer: False

Assets ARE increased by debits, but liabilities are increased by credits, not decreased. In accounting, the terms "debit" and "credit" mean "left" and "right", respectively.

7. The duties of receiving cash, recording cash receipts transactions, and having custody of cash should be assigned to a single capable individual. True or false?

Answer: False

When one individual is responsible for all of the related activities, no matter how capable, the potential for errors and fraud is increased. (This is a principle of internal control). (Accounting Principles, Canadian Edition, volume 1, by Weygandt, Kieso, and Trenholm, page 294).

8. The proper sequence for the accounting cycle is?

Answer: Analyze, journalize, post, adjust, prepare statements, close

First, the information is analyzed, then it is journalized in a general journal. Next, the journal entries are posted to the corresponding accounts. Then, any adjustments for the period are made before the financial statements are prepared. The last step is to close all temporary account at/after the end of the period.

9. The adjustment for amortization is an example of?

Answer: Apportioning costs between two or more periods

Amortization, also known as Depreciation, is the process of allocating the cost of a capital asset (Property, Plant, and Equipment) to expense over their useful life (service) in a rational and systematic manner. Amortization is a process of cost allocation, not a process of asset valuation. (Accounting Principles, Canadian Edition, volume 1, by Weygandt, Kieso, and Trenholm, page 419).

10. A $100 petty cash fund has cash of $21 and valid receipts for $80. The journal entry upon replenishment would include a...?

Answer: Credit to Cash Over and Short for $1

The only two times the Petty Cash account would have a journalized transaction are: 1. when initially establishing the Petty Cash fund; and 2. when changing the stipulated amount of the fund (for example, increasing the fund from $100 to $150). (Accounting Principles, Canadian Edition, volume 1, by Weygandt, Kieso, and Trenholm, page 301-303).

Source: Author jdrr22

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