Accounting Multiple Choice Questions PDF

**TEST 1** **PART A: MULTIPLE CHOICE (1 x 40 Marks)\ Knowledge/Understanding** **Units 1 - 4 test** 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. **TEST 2** **PART A: MULTIPLE CH...

**TEST 1** **PART A: MULTIPLE CHOICE (1 x 40 Marks)\ Knowledge/Understanding** **Units 1 - 4 test** 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. **TEST 2** **PART A: MULTIPLE CHOICE (1 x 40 Marks)\ Knowledge/Understanding** **Units 5 - 7 test** **1)** **B. Morris, the owner of Morrison Supplies, submitted an invoice received from TD Insurance for his family van; he has instructed you to issue a cheque in full payment of the account. The correct entry is:** a\. debit Automobile; credit Bank. b\. debit Car Expense; credit Bank. c\. debit Car Expense; credit B. Morris, Drawings. d\. debit Car Expense; credit Accounts Payable. e\. debit B. Morris, Drawings; credit Bank. **2)** **Which is true about the receipt of a bank credit memo/advice?** a\. debit bank as a result b\. business bank account decreases c\. is the result of cashing a cheque d\. all of the above are true e\. none of the above **3)** **Which is true about forwarding?** a\. it is written as forwarding in the ledger b\. amount comes from the balance sheet c\. it refers to an account that has no existing balance at the start of the period d\. all of the above are true e\. none of the above **4)** **The income statement is used:** a\. indicate to the owner the cash position of the business. b\. be used to determine the amount of income tax the business must pay. c\. reveal the amount of money withdrawn by the owner. d\. all of the above e\. none of the above **5)** **A debit of \$498 to Bank was posted to a customer's account instead of to Bank:** a\. debits greater than credit by \$498 b\. credits greater than debits by \$498 c\. trial balance will balance but will not be correct d\. none of the above **6)** **The fiscal year-end for a business is December 31, 20-1. On December 28, 20-1, the business pays the rent for January 20-2, and the accounting clerk debits Rent Expense and credits Bank. The GAAP that has been violated is:** a\. the time period concept. b\. principle of conservatism. c\. the matching principle. d\. the business entity concept. e\. no GAAP has been violated. **7)** **When a sales invoice is received:** a\. Accounts Receivable is debited, Fees Earned is credited. b\. Cash is debited, Fees Earned is credited. c\. Cash is debited, Accounts Receivable is credited. d\. Fees Earned is debited, Cash is credited. **8)** **During the lifetime of a business, accountants produce financial statements at specific points in time in accordance with which basic accounting concept (GAAP)?** a\. the time period concept b\. the principle of conservatism c\. the matching principle d\. the business entity concept e\. none of the above **9)** **Find the ending capital for the following company: Beginning capital \$82,000; total expenses \$65,000; net loss \$5,000; drawings \$5,000.** a\. \$70,000 b\. \$72,000 c\. \$52,000 d\. \$60,000 e\. none of the above **10)** **If a debit of \$400 is posted twice then the effect on debit and credit will be:** a\. debits will be greater than credit by \$400 b\. debits will be greater than credit by \$800 c\. credits will be greater than debit by \$400 d\. credits will be greater than debit by \$800 e\. trial balance will balance but will not be correct 11\) **All of the following will have a debit balance except:** a\. supplies b\. accounts payable c\. drawings d\. HST recoverable e\. all of the above **12) Owner took \$100 worth of photo supplies for personal use. The correct journal entry assuming HST 13%:** a\. debit drawings \$113.00 // credit Photo supplies \$100; HST recoverable \$13.00 b\. debit photo supplies \$100; debit HST recoverable \$13 // credit drawings \$13.00 c\. debit drawings \$75 // credit photo supplies \$75 d\. none of the above **13) The effect of an entire journal posted as \$500 instead of \$80:** a\. debit greater than credits by \$420 b\. credits greater than debits by \$420 c\. trial balance will balance but not correct d\. none of the above **14)** **If an entire journal entry for \$50 is posted in reverse, then the effect on debit and credit will be:** a\. debit will be greater than credit by \$50 b\. debit will be greater than credit by \$25 c\. credit will be greater than debits by \$100 d\. credit will be greater than debit by \$50 e\. none of the above **15) A book in which the accounting entries for all transactions are first recorded:** a\. source document b\. journal c\. ledger d\. balance sheet e\. equation analysis sheet **16)** **Which of the following is false:** a\. journal entries for all cash sales slips are essentially the same b\. for every sales invoice, there is a debit to an account receivable c\. every journal entry is based on a source document d\. every sales invoice can also be a purchase invoice e\. none of the above **17)** **Which of the following is true:** a\. HST account is an expense account b\. the credit entry for every cheque copy payment is the same c\. anyone in the business can initiate a business transaction d\. the purchaser of goods and services is required to make account entries for PST e\. none of the above **18) Which of the following is true?** a\. HST is payable on both purchases and sales b\. HST is recoverable on both purchases and sales c\. HST is only recoverable on sales d\. HST is only recoverable on purchases **19) Which is the correct entry for journalizing an HST refund?** a\. HST recoverable DR, Bank DR, HST payable CR b\. HST payable DR, Bank DR, HST recoverable CR c\. HST recoverable DR, HST payable CR, Bank CR d\. HST payable DR, HST recoverable CR, Bank CR **20)** **This GAAP states that the accounting for purchases must be at the cost price to the purchaser:** a\. principle of conservatism b\. full disclosure principle c\. consistency principle d\. cost principle **21) which of the following is false with regards to source documents** a\. POS summaries refers to a sale of goods or services for cash b\. Sales invoice refers to sale of goods or services for cash or on account c\. check copy is same as cash d\. Cash receipts daily summary refers to cheques received from customers on account e\. All of the following are true **22) a definition of \_\_\_\_\_\_\_\_\_\_ is to transfer information about transactions from a journal to a ledger** a\. Forwarding b\. Journalizing c\. posting d\. Recording **23) an entire journal entry for \$850 is not posted** a\. Debits greater than credit by 250 b\. Credits greater than debits by 250 c\. trial balance will not balance but will not be correct d\. None of the above **24)** **A debit of \$500 is posted as credit.**\ a. debits greater than credits by 250\ b. credits greater than debits by 250\ c. trial balance will balance but will not be correct\ d. none of the above **25)** **The bank account is over-added by \$90**\ a. debits greater than credits by \$90\ b. credits greater than debits by \$90\ c. trial balance will balance but will not be correct\ d. none of the above **26)** **There are \_\_ steps in posting. The number of steps completed in the ledger is \_\_, and in the journal \_\_.**\ a. four, three, one\ b. five, four, one\ c. five, three, two\ d. Six,five,one **27)** **If a \$20 debit is posted as \$200, the following effect on debit and credit will happen:**\ a. debit greater than credit by \$180\ b. debit greater than debit by \$220\ c. credit greater than debit by \$180\ d. Credit greater than debit by \$220\ e. none of the above **28)** **The revenue account balance of \$36,000 is listed on the trial balance as a debit, causing:**\ a. debits greater than credits by 36,000\ b. credits greater than debits by 36,000\ c. debits greater than credits by 72,000\ d. credits greater than debits by 72,000\ e. none of the above **29)** **ABC Company made a sale on account in August. Which GAAP did it violate?\ **a. time period concept\ b. revenue recognition principle\ c. matching concept\ d. business entity concept\ e. no GAAP has been violated **30) Transportation error is most likely the mistake when** a\. The trial balance difference is a multiple of 10 b\. Trial balance difference is a even number c\. trial balance difference is a multiple of 9 d\. Trial balance is balanced but not correct **31) A HST recoverable account is** a\. An asset account b\. A contra liability account c\. a liability account d\. None of the above **32) a company had a beginning capital of \$6000 total revenue of 10000 total expenses of 8000 net income of 2000 and drawings of 3000 calculate the increase or decrease in equity.** a\. -1000 b\. +1000 c\. +5000 d\. +7000 **33) which of the following is false about the drawings account** a\. Is and expense b\. Has a debit balance c\. is part of the expanded equity account d\. Can be either in cash or another asset e\. None of the above **34) the chart of accounts for a company** a\. Is same as posting reference b\. Is a chart that shows all the accounts in the fundamental accounting equation c\. lists the accounts and account numbers that identify their location in the ledger d\. Shows the balance of each account in the general ledger **35) which of the following is true** a\. Expense account normally has a credit balance b\. Paying a credit involves a credit entry to the creditors account c\. net income can be thought as debit to the capital account d\. All of the above e\. None of the above **36) the drawings account balance of \$4500 is missed when preparing the trial balance** a\. The debits greater than credit by \$4500 b\. Credits greater then debit by \$4500 c\. trial balance will balance but will not be correct d\. None of the above **37) the process of recording the journal page number in the amount and the recording of the account number in the journal is known as** a\. Cross referencing b\. Forwarding c\. journalizing d\. Posting e\. None of the above **38) which of the following accounts is not included in the equity section of the balance sheet** a\. Beginning capital b\. Ending capital c\. revenue d\. Drawings e\. All of the above accounts are included in the equity section of a balance sheet **39) if a piece of \$2000 computer was sold for \$600 the following journal entry will occur** a\. Debit bank \$600 credit equipment \$600 b\. Debit bank \$600 credit equipment \$2000 debit capital \$1400 c\. debit bank \$600 credit equipment \$2000 debit loss of sale of equipment \$1400 d\. Debit bank \$600 credit equipment \$2000 debit withdrawals \$1400 e\. None of the above **40) calculate the total expenses for the year if beginning capital=74000 total revenues=90000 withdrawals=24000 and ending capital=70000** a\. 20000 b\. 70000 c\. 50000 d\. 120000 e\. None of the above **Unit 4 Test 40 Questions** **1) An accounting process that compares cash receipts according to source documents against cash receipts according to physical count is called** a\. Adjustment b\. cash proof c\. closing d\. Reconciliation **2) The correct journal entry to record the cost incurred in accepting credit cards for businesses is CR Credit Card Expense** a\. DR Bank CR Credit Card Expense b\. DR Credit Card Expense CR Bank c\. DR Sales CR Credit card Expense d\. DR Credit Card Expense CR Sales **3) A corporation with 110,000 common shares declared a dividend of 90.20 per share April 1 to be paid April 15. Journalize the April 1% transaction:** a\. DR Retained earnings 22,000 // CR Dividends Payable 22,000 b\. DR Dividends payable 22,000 // CR Retained Earnings 22,000 c\. DR Dividends payable 22,000 // CR Bank 22,000 d\. DR Retained earnings 22,000 /I CR Bank 22,000 e\. none of the above **4) To record an overage in the journal, the bookkeeper** a\. DR bank / CR Sales and CR cash short or over b\. DR bank / DR cash short or over / CR sales c\. DR sales / CR cash short or over / CR bank d\. DR sales / DR cash short or over / CR bank **5) On February 27 the cash register tape showed cash receipts for the day to be \$980.15, The cash float at the start of the day was \$50.00. The total cash counted (including float) at the end of the day was \$1,005.15.** a\. DR Bank 955.15 DR Cash Short or over 25 // CR Sales 980.15 b\. DR Bank \$1005.15 // CR Sales 980.15 CR Cash short or over \$25 c\. DR Bank \$980.15 DR Cash Short or over \$25 // CR Sales \$1005.15 d\. DR Bank \$980.15//CR Sales \$955.15 CR Cash short or over \$25 **Refer to the following balance sheet information to answer the next 2 questions:** **6) The current ratio is:** a\. 3.0 b\. 1.08 с. 4.6 d\. 1.27 e\. none of the above **7) The quick ratio is:** a\. 3.0 b\. 1.08 с. 4.6 d\. 1.27 e\. none of the above **8) Which of the following is False?** a\. All sales of merchandise are recorded in the sales journal b\. date used when formally posting synoptic journal is the last day of the month c\. cash payments journal also known as the cash disbursements journal d\. the five journal system leads to clerks becoming specialists within the system e\. none of the above **9) When preparing a bank reconciliation statement, which of the following items must be subtracted from the bank\'s statement balance?** a\. late deposit b\. proceeds from a note c\. NSF cheques d\. journalizing error e\. None of the above **10) Which is false about the payroll register?** a\. income tax is deducted based on taxable income b\. RPP is usually a given percentage based on gross income c\. CPP and El are deducted based on gross income d\. Deductions = gross income - total income taxes - CPP - El - Health = Insurance e.none of the above **11) The accounts payable ledger is known as:** a\. a group of control accounts, b\. a subsidiary ledger c\. a general ledger d\. a liability ledger e\. none of the above, **12) A control account is: found in the general lodger controlled by the accounts receivable clerk, PO controlled by the accounts payable clerk. none of the above, 1.1** a\. DR Retained Barings Journalize a corporation\'s earnings (profit situation) b\. DR Retained earnings CR Dividends c\. DR Income Summary DR Income summary d\. DR Dividends CR Retained Earnings CR Retained Earnings **13) Journalize a corporation\'s earnings (profit situation)** a\. DR Retained Earnings CR Dividends b\. DR Retained earnings DR Income summary c\. DR Income Summary CR Retained Earnings d\. DR Dividends CR Retained Earnings **14) Which is not part of the five journal system?** a\. subsidiary journal b\. sales journal c\. cash receipts journal d\. general journal e\. all of the above are part of the five journal system **15) At the end of the month, the drawings from the \"Other Accounts Debit\" column from the cash payments journal is posted as:** a\. a debit entry to a general ledger account. b\. a credit entry to a general ledger account. c\. a credit entry to the accounts receivable ledger. d\. a debit entry to the accounts payable ledger. e\. The totals are not posted. **16) A cheque is issued to pay for a cash purchase of merchandise:** a\. cash payments journal. b\. purchases journal. c\. general journal. d\. sales journal. e\. cash receipts journal. **17) The total amounts in the accounts payable column of the purchases journal is normally posted to:** a\. posted to the debit side of the appropriate individual account. b\. posted to the credit side of the appropriate individual account. c\. posted to the debit column of the Accounts Payable account. d\. posted to the credit column of the Accounts Payable account. e, not posted. **18) Which journal should record cash sales made to a customer:** a**.** Sales journal b\. Purchase journal c\. Cash receipts journal d\. Cash payments journal e\. General journal **19) When the owner collects a debt from a customer but keeps the money for his personal use, it is entered in the:** a\. Sales journal b\. Purchase journal c\. Cash receipts journal d\. Cash payments journal e\. General journal **20) A bank debit advice received with respect to a bad cheque is entered in the:** a\. Sales journal b\. Purchase journal c\. Cash receipts journal d\. Cash payments journal e\. General journal **21) Which of the following is true about partnerships?** a\. Partnerships have a group of governing people called directors. b\. Partnerships have limited life. c\. Partnerships are subject to \"double taxation. d\. None of the above are true of partnerships. **22) If there is no partnership agreement, profits and losses:** a\. are divided equally. b\. are subject to double taxation. c\. must be kept in the business. d\. must first be used to pay off liabilities. **23) A public corporation is one that** a\. serves the public for a fee. b\. has its shares traded on a major stock exchange. c\. cannot have in excess of 50 shareholders. d\. is owned by the government e\. all of the above **24) A correcting entry is made to transfer a debit amount from the Supplies account to the Miscellaneous Expense acc. Which journal should this be recorded?** a\. Sales journal b\. Purchase journal c\. Cash receipts journal d\. Cash payments journal e\. General journal **25) An amount that represents an accumulation of profits by a corporation is called:** a\. retained earnings. b\. capital stock. c\. preferred shares. d\. par value. **26) Which of the following ratios would be of least interest to a banker considering a short-term loan?** a\. quick ratio b\. debt ratio c\. times interest earned ratio d\. inventory turnover **27) When calculating the inventory turnover ratio, one must determine:** a\. net profit b\. gross profit c\. sales d\. average merchandise inventory **28) Which of the following is true?** a\. every entry in the synoptic journal takes only one line b\. the synoptic journal should be cross balanced before the final totals are inked in and journal ruled off c\. synoptic journal ideally suited for a large company d\. main advantage of synoptic journal is time saved in journalizing transactions e\. headings in a synoptic journal are always the same as those shown in the textbook **29) The ratio that shows the extent to which a business is financed and operated on loans is:** a\. the debt ratio. b\. the acid-test ratio. C. the current ratio. d\. both a. and b. **30) Price Earnings Ratio is calculated as:** a\. (net income/owner\'s average equity) x 100 b\. net income/interest expense c\. net income (after tax)/\# of common shares outstanding d\. market price per share / earnings per share e\. none of the above **32) Partners X and Y both contributed \$50,000 in a partnership with a 3: 2 income splitting ratio for X: Y. If a \$60,000 net income was made, X and Y would each get:** a\. X: \$30,000 Y: \$30,000 b\. X: \$36,000 Y: \$24,000 c\. X \$24000 Y:\$36000 d\. X \$40000 Y:\$20000 **33)FordE and Lincoln formed a partnership with capital contributions worth \$45,000 and \$55,000 respectively. Their partnership agreement calls for Ford to receive a \$12,000 per year salary. Also each partner is to receive a share of earnings equal 10% return on capital investments. The remaining income or loss is to be divided equally. If the net income for the year is \$28,000, then Ford and Lincoln respective share are:** a\. \$14,000, \$14,000 b\. \$12,000, \$16,000 c\. \$20,000, \$8,000 d\. \$16,500, \$11,500 e\. none of the above **34) Which of the following is True?** a\. petty cash account in the general ledger must never change b\. petty cash voucher must be prepared for every payment out of the fund c\. petty cash fund is used for the purpose of cutting down on the number of cheques issued d\. the petty cash summary is organized by general ledger accounts e\. all of the above are true **35) Amount used to determine how much income tax is to be withheld is known as:** a\. tax credits b\. gross earnings c\. employee contributions d\. taxable earnings **36) if a worker makes \$11.50 per hour, for a regular 40 hour work week and overtime pay beyond that, a 46 hour work week would result in the gross pay of:** a\) \$529 b\) \$563 c\) \$598 d\) \$793 **37)If an employee pays 20 cents a week per \$1 000 worth of insurance, and the total insurance coverage is \$32 000 the weekly premium is** a\. \$6.40 b\. \$64 c\. \$640 d\. None of the above **38) Remuneration refers to:** a\. wages, salaries or commissions paid to employees b\. taxes paid by employees c\. tax credits that reduces the amount of tax an individual must pay d\. a private pension plan approved by the government for income tax purposes e\. all of the above **39)To calculate an employee\'s income tax deduction, a payroll clerk must:** a\. use a fixed percentage given b\. use a fixed amount set by the company c\. consult the tax tables for each employee d\. income tax is only calculated at the end of year during filing time **40)The journal entry to record El contribution by employer is:** a: DR EI expense CR El payable b\. DR EI payable CR El payable c\. DR El expense CR bank d\. none of the above -- -- -- -- -- -- -- --