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Accounting #3 Trivia Quiz

Here is another quiz on basic accounting. Good luck.

A multiple-choice quiz by jdrr22. Estimated time: 3 mins.

Author
jdrr22

Time
3 mins

Type
Multiple Choice

Quiz #
87,559

Updated
Dec 03 21

# Qns
5

Difficulty
Average

Avg Score
3 / 5

Plays
4651

One at a Time - Single Page - Timed Game

Question 1 of 5

1. The financial statement that summarizes information concerning the cash inflows and outflows during a period is the ...? Hint

Statement of Retained Earnings

Balance Sheet

Statement of Cash Flows

Income Statement

NEXT>

Question 2 of 5

2. If current assets are $1,500 and current liabilities are $1,000, the current ratio is ...? Hint

0.7 to 1

($500)

1.5 to 1

$500

NEXT>

Question 3 of 5

3. The adjusting entry for unearned revenues results in a debit to an asset account and a credit to a revenue account.

True

False

4. Moishe's Tune-up Shop follows the revenue recognition principle. Moishe services a car on July 31. The customer picks up the vehicle on August 1 and mails the payment to Moishe on August 5. Moishe receives the cheque in the mail on August 6. When should Moishe show that the revenue was earned? Hint

August 1

August 6

August 5

July 31

NEXT>

Question 5 of 5

5. Closing entries are made ...? Hint

in order to transfer net income/loss and owner's drawings to the owner's capital account

so that all Assets, Liabilities, and Owner's Capital accounts will have zero balances when the next accounting period starts

in order to terminate the business as an operating entity

so that financial statements can be prepared

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Quiz Answer Key and Fun Facts

1. The financial statement that summarizes information concerning the cash inflows and outflows during a period is the ...?

Answer: Statement of Cash Flows

The primary purpose of a statement of cash flows is to provide financial information about the cash receipts and cash payments of an enterprise for a specific period of time. ("Accounting Principles, Canadian Edition", Volume 1, by Weygandt, Kieso, and Trenholm, p. 26.)

2. If current assets are $1,500 and current liabilities are $1,000, the current ratio is ...?

Answer: 1.5 to 1

The calculation for the current ratio is as follows: Current assets divided by Current liabilities. So, $1,500 divided by $1,000 = 1.5 (to 1). This ratio shows the difference between current assets and current liabilities, which is called working capital. ("Accounting Principles, Canadian Edition", Volume 1, by Weygandt, Kieso, and Trenholm, p. 156.)

3. The adjusting entry for unearned revenues results in a debit to an asset account and a credit to a revenue account.

Answer: False

The adjusting entry for unearned revenues actually results in a debit to a liability account (Unearned Revenues), and a credit to a revenue account (Revenues Earned.)

Answer: July 31

The revenue recognition principle states that revenue be recognized in the accounting period in which it is earned. In a service enterprise, revenue is considered earned at the time the service is performed. ("Accounting Principles, Canadian Edition", Volume 1, by Weygandt, Kieso, and Trenholm, p. 93.)

5. Closing entries are made ...?

Answer: in order to transfer net income/loss and owner's drawings to the owner's capital account

Closing entries formally recognize in the ledger the transfer of net income or net loss and the owner's drawings to the owner's capital account, as shown in the statement of owner's equity. ("Accounting Principles, Canadian Edition", Volume 1, by Weygandt, Kieso, and Trenholm, p. 143.)

Source: Author jdrr22

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