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Fabm Review-Quiz

This document contains multiple-choice questions that test accounting concepts and principles related to financial statements, the accounting cycle, inventory systems, accounts receivable, bad debts, depreciation, and accrued expenses. Specifically, it asks questions about the purpose of financial statements like the balance sheet, income statement, and statement of cash flows. It also asks about key steps in the accounting cycle like adjusting entries. Other questions relate to inventory costing methods, sales and collection of accounts receivable, calculating allowances for bad debts, depreciation expense, and accruing rent expense payable.

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33 views1 page

Fabm Review-Quiz

This document contains multiple-choice questions that test accounting concepts and principles related to financial statements, the accounting cycle, inventory systems, accounts receivable, bad debts, depreciation, and accrued expenses. Specifically, it asks questions about the purpose of financial statements like the balance sheet, income statement, and statement of cash flows. It also asks about key steps in the accounting cycle like adjusting entries. Other questions relate to inventory costing methods, sales and collection of accounts receivable, calculating allowances for bad debts, depreciation expense, and accruing rent expense payable.

Uploaded by

ASSET MPC
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1. It tells about the result of business operation.

a) Accounting b) financial statements c) statement of income


2. This statement shows the financial condition of the business.
a) Balance Sheet b) Statement of Income c) Statement of Equity
3. A financial statement that shows the sources and uses of cash is
a) Statement of Financial Condition b) Statement of Equity c) Statement of Cash Flows
4. This shows the increase and decrease in equity in a given period.
a) Statement of Changes in Equity b) Statement of Income c) Statement of Cash Flows
5. Which of the following statements tell/tells the reason for the preparation of adjusting entries?
a) To record accrued incomes and expenses
b) To record prepayments of expenses and pre-collected incomes.
c) To record depreciations and allowance for bad debts
d) All of the above
6. A debit in cash in cash may mean
a) Increase in liability b) increase in assets c) increase in equity d) all of these
7. When sales are made on account, debit ________ and credit ________
a) Cash; Accounts Receivable b) Accounts receivable; Sales c) Sales; Cash
8. Collection of accounts receivable is a debit to _____ and credit to _____
a) Cash; accounts receivable b) sales; accounts receivable c) cash; sales
9. In a perpetual inventory system, return from a credit customer is a
a) Debit to sales returns and allowances; credit to accounts receivable
Debit to merchandise inventory; credit to cost of sales
b) Debit to merchandise inventory; credit to Sales Returns and Allowances
Debit to sales returns and allowances; credit to accounts receivable
10. In a periodic system of inventory, a return from a credit customer is
a) A debit to sales returns and allowances; credit to cash
b) A debit to sales returns and allowances; credit to accounts receivable
c) A debit to accounts receivable, credit to sales
11. The first step in the accounting cycle is
a) Gathering of information and details
b) Trial balance
c) Adjustments
12. If an account sales of 360,000.00 under the terms 3/10, 2/20, n/30 is paid within 15 days, how much is the
sales discount?
a) 10,800.00
b) 7,200.00
c) no more discount
13. An asset acquired for 600,000.00 with an estimated salvage value of 250,000.00 after 10 years is depreciated
quarterly at
a) 9,750.00
b) 3,500.00
c) 8,750.00
14. If the total receivable of a business is 900,000.00 and 2.5% of which is estimated to be uncollectible, how
much is the allowance for bad debts? Give the journal entry.

15. A business paid rent of 15,000.00 on the 15 th of the month. Financial statements are prepared monthly. How
much is the accrued rent expense payable? Give the journal entry.

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