University of the Southern Caribbean

Accounting Quiz
15 multiple choice questions

1. Fixed Assets were valued at $50,000 at the beginning of the year. There were no
purchases or sales of Fixed assets during the year, but the value of Fixed assets
recorded at the end of the year was $45,000.
How can this difference be explained?
a. There was a mistake in recording Fixed Assets at the end of the year
b. Fixed assets depreciated by $5000 during the year
c. Fixed assets of $5000 were accrued at the end of the year
d. Fixed assets of $5000 were prepaid at the end of the year

2. The Cash account had an opening balance of $10,000. During the year, total receipts
were $65,000 and total payments were $45,000. What is the closing balance in the
Cash A/c?
a. $75000 c. $55,000
b. $120,000 d. $30,000

3. $
Sales 11,600
Opening stock 400
Closing stock 750
Purchases 5200

What is the cost of goods sold?

a. $4775 c $6750
b. $4850 d. $6275
 4. Which type of adjustment occurs when cash is not collected or paid, but the related
income or expense is reportable in the current period?
A. accrual
B. deferral
C. estimate
D. cull

5. On which financial statement would the Supplies account appear?

A. Balance Sheet
B. Income Statement
C. Retained Earnings Statement
D. Statement of Cash Flows

6. Revenue earned but not yet collected is an example of which of the following?
A. accrued expense
B. accrued revenue
C. deferred expense (prepaid expense)
D. deferred revenue (unearned revenue)

7. If current assets are $112,000 and current liabilities are $56,000, what is the current ratio?
A. 200 percent
B. 50 percent
C. 2.0
D. $50,000

8. If current assets are $100,000 and current liabilities are $42,000, what is the working
capital?
A. 200 percent
B. 50 percent
C. 2.0
D. $58,000

9. Which of the following accounts is considered a temporary or nominal account?

A. Fees Earned Revenue
B. Prepaid Advertising
C. Unearned Service Revenue
D. Prepaid Insurance

10. Which of the following accounts is considered a permanent or real account?

A. Interest Revenue
B. Prepaid Insurance
C. Insurance Expense
D. Supplies Expense
11. Which of the following accounts are used when recording a purchase using a periodic inventory
system?
A. cash, purchases
B. accounts payable, sales
C. accounts payable, accounts receivable
D. cash, merchandise inventory

12. A retailer pays on credit for $650 worth of inventory, terms 4/10, n/40. If the merchandiser pays
within the discount window, how much will the retailer remit in cash to the manufacturer?
A. $26
B. $630.50
C. $650
D. $624

13. Depreciation is
A. the cost of a current asset wearing away
B. the cost of a replacement
C. the salvage value of a fixed asset plus its original cost
D. the part of the cost of the fixed asset consumed during its period of use by the business

14. An invoice shows a total of $3200 less 2 ½ cash discount if paid within 30 days. If the
invoice was paid after the 30-day period what amount would be shown on the cheque?
a. $3,200
b. $3,040
c. $3,120
d. $2,800

15. Which of these accounts is never closed?

A. Dividends
B. Retained Earnings
C. Service Fee Revenue
D. Income Summary