Skip to Content
Home └AC108: BOOKEEPPING ALL-IN-ONE └Module 1 Quiz

AC108: BOOKEEPPING ALL-IN-ONE

0 %

Completed

Course content

Module 1 Quiz

100 XP
Prev Next
Fullscreen Share
Rating
0 0

There are no comments for now.

Join this Course
to be the first to leave a comment.

1. 1. What is the primary purpose of bookkeeping in a business?
a) to hire more employees b) To keep track of financial transactions c) To reduce the company's expenses d) To increase the company's revenue - e) To prepare tax returns
2. 2. Which accounting method records transactions only when cash changes hands?
a) Accrual accounting b) Cash-basis accounting c) Double-entry accounting d) Single-entry accounting e) Credit-based accounting
3. 3. In bookkeeping, what is the formula for keeping books in balance?
a) Assets = Liabilities - Equity b) Assets = Revenue + Expenses c) Assets = Liabilities + Equity d) Assets = Liabilities - Revenue e) Assets = Equity + Drawings
4. 4. What document summarizes all of a company's financial transactions and activities for the year?
a) Income statement b) Balance sheet c) General Ledger d) Cash Receipts journal e) Accounts payable ledger
5. 5. Which of the following is a key element of internal controls in bookkeeping?
a) Reducing employee benefits b) Separating duties appropriately c) Increasing product prices d) Reducing inventory counts e) Hiring more accountants
6. 6. Which financial statement presents a snapshot of a company's financial position at a specific date?
a) Income Statement b) Statement of Cash Flows c) Balance Sheet d) Retained Earnings Statement e) Equity Statement
7. 7. What term refers to all the debts a company owes?
a) Assets b) Liabilities c) Equity d) Revenue e) Expenses
8. 8. Which account is used to track all outstanding bills from vendors, contractors, and consultants?
a) Accounts Receivable b) Depreciation c) General Ledger d) Accounts Payable e) Payroll
9. 9. In the accounting cycle, what is the first step that initiates the process?
a) Journal entries b) Posting c) Transactions d) Financial statements e) Closing the books
10. 10. Which term refers to the process of preparing the balance sheet and income statement using corrected account balances?
a) Posting b) Trial balance c) Adjusting journal entries d) Financial statements e) Worksheet
11. 11. Which of the following is a key difference between cash-basis and accrual accounting?
a) The method of tracking expenses b) The method of recording transactions c) The types of assets recorded d) The types of liabilities recorded e) The method of tracking equity
12. 12. In cash-basis accounting, when are transactions recorded?
a) When they are incurred b) When cash actually changes hands c) At the end of the accounting period d) When the transaction is posted to the general ledger e) When the financial statements are prepared
13. 13. Which of the following is a drawback of cash-basis accounting?
a) It does a poor job of tracking cash b) It can only be used by large corporations c) It cannot track future payments or receivables d) It requires double-entry bookkeeping e) It matches expenses with revenue accurately
14. 14. What does accrual accounting do better than cash-basis accounting?
a) Tracking cash flow b) Matching revenue with expenses c) Tracking assets d) Simplifying bookkeeping processes e) Recording cash transactions
15. 15. In double-entry bookkeeping, what is always true about debits and credits?
a) Debits increase and credits decrease the account balance b) Debits decrease and credits increase the account balance c) Debits and credits must always be equal in value d) Debits are recorded before credits e) Credits are recorded before debits
16. 16. What is the purpose of the Chart of Accounts in a business?
A. To track only cash transactions B. To organize and categorize all financial transactions of a business C. To manage personal checkbooks D. To keep track of inventory only E. To list all employees and their salaries
17. 17. Which of the following accounts is NOT considered a current asset?
A. Cash in Checking B. Accounts Receivable C. Inventory D. Mortgage Payable E. Prepaid Insurance
18. 18. Why is it important to have a well-organized Chart of Accounts?
A. It simplifies personal budgeting B. It helps in accurately recording transactions and preparing financial reports C. It is required by law D. It helps in managing customer relationships E. It is only needed for large corporations
19. 19. Which type of account tracks what a business owes to lenders and creditors?
A. Asset B. Equity C. Liability D. Revenue E. Expense
20. 20. What is the main difference between current assets and long-term assets?
A. Current assets are more valuable B. Long-term assets depreciate faster C. Current assets are expected to be used or converted into cash within 12 months, while long-term assets have a life span of more than 12 months D. Long-term assets are intangible E. Current assets are not recorded in the Chart of Accounts
21. 21. A business purchases a new piece of equipment for $5,000. Which type of account should this transaction be recorded under?
A. Current Asset B. Long-Term Asset C. Current Liability D. Revenue E. Expense
22. 22. If a company pays its employees' salaries, which type of account will this transaction affect?
A. Asset B. Liability C. Equity D. Revenue E. Expense
23. 23. The account "Accounts Receivable" is used to track:
A. Cash payments received from customers B. Money the company owes to suppliers C. Inventory levels D. Sales made on credit to customers E. Revenue generated from services
24. 24. How often should a business review and possibly update its Chart of Accounts?
A. Weekly B. Monthly C. Quarterly D. Annually, and as needed during the year E. Never
25. 25. In the Chart of Accounts, which category includes accounts that track the owners' investments and claims against the company’s assets?
A. Asset B. Liability C. Equity D. Revenue E. Expense