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Foundation of Accounting and Reporting

Quiz: Foundation of Accounting and reporting

Time Value of Money

Time Value of Money

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Quiz: Foundation of Accounting and reporting

Foundational Courses
Foundation of Accounting and Reporting
Quiz: Foundation of Accounting and reporting

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Question 1 of 11

1. Question

What is the primary purpose of journal entries in accounting?

To prepare financial statements
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To ensure compliance with tax regulations
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To record financial transactions in chronological order
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To calculate net profit
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Question 2 of 11

2. Question

A company purchases office supplies on credit. What is the correct journal entry?

Debit Cash; Credit Office Supplies
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Debit Accounts Payable; Credit Office Supplies
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Debit Office Supplies; Credit Accounts Payable
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Debit Office Supplies; Credit Cash
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Question 3 of 11

3. Question

What does a ledger provide in the accounting cycle?

A list of all transactions
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A summary of accounts with balances
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The final financial statements
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A record of only cash transactions
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Question 4 of 11

4. Question

If the trial balance does not balance, which of the following could be a possible cause?

A missing entry in the journal
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Transposition error in account balances
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An error in the balance sheet
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A correct accounting adjustment
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Question 5 of 11

5. Question

Which of the following statements best describes the difference between the income statement and the balance sheet?

The income statement reports financial position, while the balance sheet reports profitability
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The income statement reports revenues and expenses, while the balance sheet reports assets and liabilities
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Both statements report financial position
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The income statement only reports cash flows
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Question 6 of 11

6. Question

What type of account is ‘Accounts Receivable’ classified as?

Revenue
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Liability
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Expense
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Asset
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Question 7 of 11

7. Question

Under accrual accounting, when is revenue recognized?

When cash is received
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When a customer places an order
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When the performance obligation is satisfied
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At the end of the fiscal year
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Question 8 of 11

8. Question

Why are closing entries made at the end of the accounting period?

To adjust for missing transactions
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To transfer temporary account balances to retained earnings
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To reconcile bank statements
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To prepare budgets for next year
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Question 9 of 11

9. Question

What financial statement provides insight into a company’s liquidity?

Balance Sheet
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Income Statement
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Statement of Retained Earnings
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Trial Balance
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Question 10 of 11

10. Question

The matching principle ensures that expenses are recorded in the same period as:

Related revenues
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Cash disbursements
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Capital investments
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Future revenues
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Question 11 of 11

11. Question

Which of the following is a fundamental accounting equation?

Revenue – Expenses = Net Income
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Assets = Liabilities + Equity
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Cost of Goods Sold – Operating Expenses = Gross Profit
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Income Statement + Balance Sheet = Financial Statements
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