Skip to content

Latest commit

 

History

History
106 lines (76 loc) · 4.54 KB

accounting-quiz.md

File metadata and controls

106 lines (76 loc) · 4.54 KB
Raw

Accounting

Q1. Which statement is not an advantage of robotic process automation (RPA)?

  • Bots are more creative than humans
  • Bots do no need to take time off
  • Bots improve efficiency
  • Bots can eliminate human errors

Q2. What effect does a contra asset account have on a balance sheet?

  • A contra asset is not an accounting term
  • A contra asset has a credit balance and therefore a negative effect on total assets
  • A contra asset with a positive balance will increase overall liabilities
  • A contra asset has a debit balance and therefore a positive effect on total assets

Q3. Internal controls may be preventative, detective, corrective, or directive. Which is a detective control?

  • data backups
  • physical inventory check
  • employee background checks
  • physical locks on inventory warehouse

Q4. On March 15, a business receives an invoice from the power company for utilities used in February. The retailer pays the invoice on April 1. The business uses accrual-based accounting. Which month should the business recognize the expense?

  • April
  • March
  • no record required
  • February

Q5. Which choice is a general guideline for adequate separation of duties to prevent both fraud and error?

  • A person who has control over an asset should not safeguard that asset.
  • A person who has temporary or permanent custody of an asset should not account for that asset.
  • A person who has record-keeping responsibility should not make journal entries.
  • A person who has operational responsibility should not authorize transactions for the area.

Q6. What does the cost of a unit of product under absorption costing method consist of?

  • direct materials, direct and indirect labor, and fixed overhead
  • direct materials, indirect labor, and variable and fixed overhead
  • direct materials, direct labor, and both variable and fixed overhead
  • direct materials, direct and indirect labor, and variable overhead

Q7. Which answer best describes accruals and deferrals?

  • Accruals are past cash receipts and payments, while deferrals are expected future cash receipts and payments.
  • Both accruals and deferrals are both expected future cash receipts and payments.
  • Accruals are expected future cash receipts and payments, while deferrals are past cash receipts and payments.
  • Both accruals and deferrals are not expected past cash receipts and payments.

Q8. What do you call a situation where more than one person collaborates to circumvent existing internal controls?

  • assigned responsibility
  • segregation of duties
  • fraud prevention
  • collusion

Q9. Which is not an example of an internal control activity?

  • review of manufacturing plan
  • segregation of duties
  • bank reconciliations
  • approval process

Q10. Which budgeting approach request justification of all expenditures?

  • zero-based budgeting
  • master budgeting
  • rolling budgets
  • bottom-up budgeting

Q11. What does the discontinued operations section of the income statement refer to?

  • disposal of a major product line or major geographical area of operations
  • sale of unused or obsolete equipment and discontinued inventory
  • a plant shutdown or decommissioning of a facility
  • net income or loss for products completed and sold

Q12. How are the three financial statements (income, statement, balance sheet, and cash flow statement) linked?

  • Only the assets are reflected in the cash flow statement, and the net income expenses correlate with the liabilities.
  • The net income goes to retained earnings, but the cash flow remains independent.
  • The gross profit goes to retained earning, and the shareholder equity total is added to the cash flow statement
  • The net income goes to the retained earning and to the cash flow statement

Q13. Which is not one of the four perspectives of the balanced scorecard?

  • internal business
  • learning and growth
  • quantitative
  • customer

Q14. What would be deducted from the balance per books when doing a bank reconciliation?

  • deposits in transit
  • bank service fees
  • outstating checks
  • electronic fund transfers/payments

Q15. What situation could be the results of the three retails store employees sharing the same cash register?

  • a thorough internal control activity
  • a violation of assignment of responsibility
  • a violation of segregation of duties
  • a support process to avoid fraud