South Branch Career and Technical Center
Accounting Principles I
Directions: 1. Read each question carefully;
2. read choices a, b, c and d;
3. select the correct answer; you may enter ONLY ONE ANSWER;
4. using your mouse, place the cursor over the "option button" to the left side of the correct answer. "Left click" the cursor. The center of the option button should become green. If it does not, please ask your instructor for assistance. After the option button becomes green, you have successfully answered the question, and you may move on to the next question.
5. When you have finished the test, please re-read and check your answers. When you feel you have done your best, go to "File" in the upper left hand side of your task bar, select the "Print" option. When the print box appears, press OK. Your completed test should begin printing.
Cash taken out of a business for personal use by an owner is recorded as:
a) a debit to Capital
and a credit to Drawing.
b) a debit to Drawing
and a credit to Capital.
c) a debit to Capital
and a credit to Cash.
d) a debit to
Drawing and a credit to Cash.
Question 2
Planning, recording, analyzing, and interpreting financial information is called
a) business planning.
b) accounting.
c) records
management.
d) journalizing.
Question 3
All of the following are entry level accounting positions except
a) payroll clerk.
b) accounts payable
clerk.
c) senior
accountant.
d) bookkeeper.
Question 4
All of the following items are confidential EXCEPT
a) employee
payroll.
b) company net
gain or loss.
c) company tax
ID number.
d) employee
names.
Question 5
Which of the following is an ethical behavior?
a) hiring a friend
b) age discrimination
c) over billing
customers
d) hiring the most
qualified candidate
Question 6
Various types of business papers used as the basis for recording business transactions are called
a) source
documents.
b) recording
papers.
c)
transpositions.
d) posting orders.
Question 7
Which of the following types of information is NOT found in the chart of accounts?
a) account title
b) account numbers
c) page numbers
d) categories of
accounts
Question 8
In the chart of accoutns, the account number for liabilities will begin with a
a) 1.
b) 2.
c) 3.
d) 4.
Question 9
In a journal, the year and month are written
a) only once at
the bottom of the page.
b) only once at
the top of the page.
c) once for
each entry.
d) only once
in the middle of the page.
Question 10
A(n) _______ is an all-purpose chronological record used for recording transactions in a business.
a) general journal
b) general ledger
c) permanent
accounts
d) temporary
accounts
Question 11
Transferring information from journal to ledger is called
a) journalizing.
b) posting..
c) reconciling.
d) updating..
Question 12
The first step in preparing a trial balance is to
a) write the
name of the company, "Trial Balance," and the date at the top of the trial
balance form.
b) write the
account titles and balances on the form.
c) determine
the balance of each account in the ledger.
d) calculate
the debit and credit columns and check for equality.
Question 13
A statement that reports a business' financial progress over a period of time is a(n)
a) balance sheet.
b) owner's equity
statement.
c) income
statement.
d) schedule of
accounts receivable.
Question 14
Entries made at the end of a fiscal period to bring certain accounts up-to-date are
a) reversing entries.
b) correcting
entries.
c) closing entires.
d) adjusting
entries.
Question 15
A post-closing trial balance is done
a) after all
adjusting and closing entries are completed..
b) after adjusting
but before closing entries are completed.
c) before adjusting
and closing entries are completed.
d) after all are
closed.
Question 16
Advantages of computerized accounting include all of the following EXCEPT
a) speed.
b) increased error
protection..
c) automatic posting.
d) determining
debits and credits.
Question 17
What is the basic formula for payroll?
a) Net Earning -
Total Deductions = Gross Pay
b) Total Earning -
Federal Income Tax = Net Earnings
c) Total
Earnings - Total Deductions = Net Earnings
d) Net Income
- Total Deductions = Net Earnings
Question 18
The journal entry to record payroll would include a credit to all of the following EXCEPT
a) FICA/Social
Security Payable.
b) Federal Income Tax
Payable..
c) Union Dues
Payable.
d) Salary Expense.
Question 19
Employer payroll taxes include all of the following EXCEPT
a) Federal Income
Tax.
b) Social Security
Tax.
c) Medicare Tax.
d) Federal
Unemployment Tax.
Question 20
Which of the following is a MANDATORY payroll deduction?
a) hospital
insurance premiums
b) federal
income tax
c) vacation
club
d) savings
bond
Question 21
What happens to the accounting equation when you buy a new computer on account?
a) assets and
liabilities increase
b) assets and owner's
equity increase
c) assets decrease and
liabilities increase
d) liabilities
increase and owner's equity decrease
Question 22
When recording a transaction in a Sales Journal, you debit
a) Accounts
Receivable.
b) Cash.
c) Merchandise
Inventory.
d) Sales.
Question 23
Debits are used to record
a) decreases in
withdrawals.
b) increases in
assets.
c) increases in
liabilities.
d) increases in revenue.
Question 24
What is the basic accounting equation?
a) Assets =
Liabilities + Owner's Equity
b) Debits = Credits
c) Increases =
Decreases
d) Net Income
= Revenue - Expenses.
Question 25
The accuracy of a journal is proven by the principle
a) Assets =
Liabilities + Owner's Equity.
b) Debits = Credits.
c) Increases =
Decreases.
d) Net Income =
Revenue - Expenses.
Question 26
Trial balance columns on a worksheet are used to ensure that
a) adjustments
are recorded correctly.
b) Assets =
Liabilities + Owner's Equity.
c) debits =
credits in the journals.
d) debits =
credits in the ledger.
Question 27
The second line of the heading on any financial statement shows the
a) authorizing
signature.
b) date of the
statement.
c) name of the
company.
d) name of the
statement.
Question 28
The normal balance of the Accounts Receivable account is
a) debit.
b) both debit
and credit.
c) credit.
d) never debit
or credit.
Question 29
The balance of the Income Summary account
a) is always
debit.
b) is always
credit.
c) is neither
debit or credit.
d) can be
either debit or credit.
Question 30
The entry to establish a petty cash fund is
a) debit Cash and
credit Petty Cash.
b) debit
Miscellaneous Expense and credit cash.
c) debit Petty
Cash and credit Miscellaneous Expense.
d) debit Petty Cash
and credit Cash.
Question 31
The check endorsement that consists of only a name is called a
a) blank
endorsement.
b) special
endorsement.
c) full
endorsement.
d) restrictive
endorsement.
Question 32
Income Summary is
a) a temporary
account.
b) an asset account.
c) a liability
account.
d) a permanent
account.
Question 33
The GREATEST difference in accounting records between a sole proprietorship and a partnership lies in the handling of what accounts?
a) Asset
b) Expense
c) Liability
d) Owner's Equity
Question 34
An employee's paycheck is written for the amount of
a) total
earnings.
b) gross pay.
c) net pay.
d) total
deducations.
Question 35
Which of the following should NOT be completed when an error is made in preparing a payroll check?
a) a new check
should be prepared
b) void should
be written on the check
c) void should
be written on the check stub
d) void should
be written on the time card.
Question 36
A federal tax used for state an federal administrative expenses of the unemployment program is called
a) FICA / Social
Security tax.
b) payroll tax.
c) total earnings.
d) federal
unemployment tax.
Question 37
When Assets = Liabilities + Capital, the
a) Balance
sheet is assumed to be in balance.
b) Balance
sheet is out of balance.
c) Income
statement is in balance.
d) Income
statement is out of balance.
Question 38
If you make $5.25 per hour, your hourly overtime rate is
a) $10.50
b) $6.78
c) $7.88
d) $8.75
Question 39
The tax that provides for retirement and disability benefits is
a) Federal
unemployment tax.
b) FICA tax.
c) Income tax.
d) State
unemployment tax.
Question 40
You instruct the payroll department to withhold taxes from your paycheck by giving them a
a) W2 Income and Tax
Statement.
b) W3 Transmittal of
Income and Tax Statement.
c) W4 Employee
Withholding Allowance Certificate.
d) W5 Earned Income
Credit Advance Certificate.
Question 41
A written order authorizing a bank to pay a specific amount to the holder is called
a) a check.
b) a document.
c) a
requisition.
d) an order.
Question 42
A form used to record cash and checks to be added to a bank account is
a) a check register.
b) a deposit slip.
c) a disposition.
d) an endorsement.
Question 43
What type of endorsement has "For Deposit Only" written above the check endorser's signature?
a) Blank
b) Full
c) Restrictive
d) Special
Question 44
When preparing a bank reconciliation, outstanding checks should be
a) added to the
bank balance.
b) added tot he
checkbook balance.
c) subtracted
from the bank balance.
d) subtracted
from the checkbook balance.
Question 45
When entering your accounting system on the company computer, what item do you enter FIRST?
a) accounts
receivable
b) chart of accounts
c) general ledger
d) trial balance
Question 46
The FINAL step in the accounting cycle is creating
a) a Balance Sheet.
b) a Post-Closing
Trial Balance.
c) a Schedule of
Accounts Payable.
d) an Income
Statement.
Question 47
The BEST reason for you to analyze financial information is to determine
a) the
profitability of the company.
b) what product
to sell.
c) where to
place a new plant.
d) who to
hire.
Question 48
Considering the differences between merchandising, distribution , and service businesses, a service business is generally NOT concerned with
a) earning revenue.
b) incurring
expenses.
c) keeping Cost of
Merchandise Sold records.
d) working under the
equation, "Asset = Equities."
Question 49
You receive a salary of $200 a week plus a commission 2% of gross sales. Your gross sales totaled $4,000 this week, so your gross earnings are
a) $202.
b) $204.
c) $260.
d) $280.
Question 50
When hiring someone, it is illegal for you to consider any of the following ietms EXCEPT
a) ethnic background.
b) marital status.
c) necessary skills..
d) religious
beliefs.