Basic Accounting Exam: Quiz! MCQ

Approved & Edited by ProProfs Editorial Team

The editorial team at ProProfs Quizzes consists of a select group of subject experts, trivia writers, and quiz masters who have authored over 10,000 quizzes taken by more than 100 million users. This team includes our in-house seasoned quiz moderators and subject matter experts. Our editorial experts, spread across the world, are rigorously trained using our comprehensive guidelines to ensure that you receive the highest quality quizzes.

Learn about Our Editorial Process

| By Lnwilcox

Lnwilcox

Community Contributor

Quizzes Created: 2 | Total Attempts: 2,170

Questions: 10 | Attempts: 1,808 | Updated: Mar 21, 2023

Questions

Settings

Feedback

During the Quiz End of Quiz

Difficulty

Sequential Easy First Hard First

Play as

Quiz Flashcard

Create your own Quiz

Share on Facebook Share on Twitter Share on Whatsapp Share on Pinterest Share on Email Copy to Clipboard Embed on your website

Questions and Answers

1.

A debit entry to an account.
- A.
  
  Increases liabilities
- B.
  
  Increases OE
- C.
  
  Increases Assets
- D.
  
  Increases both a and b
Correct Answer
C. Increases Assets

Explanation
A debit entry to an account increases the assets of a company. This means that the company has received or acquired more resources or valuables, which are considered as assets. Therefore, the correct answer is "Increases Assets."

Rate this question:

4
0
2.

Which account types normally have a credit balance?
- A.
  
  Revenues
- B.
  
  Liabilities
- C.
  
  Expenses
- D.
  
  Both a and b
Correct Answer
D. Both a and b

Explanation
Both revenues and liabilities normally have a credit balance because they represent increases in the owner's equity and amounts owed to external parties respectively. Revenues are the income earned by a business, which increases the owner's equity and is recorded as a credit. Liabilities, on the other hand, represent the amounts owed by a business to external parties, such as loans or accounts payable, and are also recorded as a credit. Therefore, both revenues and liabilities have credit balances in the accounting equation.

Rate this question:

3
0
3.

An attorney performs services of $1,100 for a client and receives $400 cash with the remainder on the account. The journal entry for this would:
- A.
  
  Debit cash, credit AR, credit service revenue
- B.
  
  Debit cash, debit service revenue, credit AR
- C.
  
  Debit cash, debit AR, credit service revenue
- D.
  
  Debit cash, credit service revenue
Correct Answer
C. Debit cash, debit AR, credit service revenue

Explanation
The correct answer is debit cash, debit AR, credit service revenue. This is because the attorney receives $400 in cash, which is recorded as a debit to the cash account. The remaining amount of $700 is recorded as a debit to accounts receivable (AR), representing the amount owed by the client. Finally, the attorney performed services worth $1,100, which is recorded as a credit to the service revenue account.

Rate this question:
4.

The list of accounts with their balances is the:
- A.
  
  Journal
- B.
  
  Trial balance
- C.
  
  Chart of accounts
- D.
  
  Balance sheet
Correct Answer
B. Trial balance

Explanation
A trial balance is a list of all the accounts in a company's general ledger along with their respective balances. It is used to ensure that the total debits equal the total credits in the accounting system, which helps in identifying any errors or discrepancies. Therefore, the given answer is correct as it accurately describes the purpose and content of a trial balance.

Rate this question:
5.

The basic summary device of accounting is the:
- A.
  
  Account
- B.
  
  Ledger
- C.
  
  Journal
- D.
  
  Trial balance
Correct Answer
A. Account

Explanation
The basic summary device of accounting is an account. Accounts are used to record and track the financial transactions of a business. They provide a systematic way of organizing and summarizing financial information, allowing businesses to analyze their financial performance. Accounts are typically categorized into different types, such as assets, liabilities, equity, revenue, and expenses, to provide a clear picture of the financial position and performance of a business.

Rate this question:
6.

The beginning cash balance was $3,000. At the end of the period, the balance was $2,000. If total cash paid out during the period was 27,000, the number of cash receipts was:
- A.
  
  22000
- B.
  
  28000
- C.
  
  32000
- D.
  
  26000
Correct Answer
D. 26000

Explanation
The beginning cash balance was $3,000 and the ending cash balance was $2,000. This means that there was a decrease of $1,000 in the cash balance. The total cash paid out during the period was $27,000. Since the cash balance decreased by $1,000, and the total cash paid out was $27,000, it can be inferred that $26,000 was received as cash receipts during the period.

Rate this question:

3
0
7.

In a double-entry accounting system:
- A.
  
  Liabilities, OE, and revenues all have normal debit balances
- B.
  
  A debit entry is recorded on the left side of a T-account
- C.
  
  Half of all the accounts have a normal credit balance
- D.
  
  Both a and c are correct
Correct Answer
B. A debit entry is recorded on the left side of a T-account

Explanation
In a double-entry accounting system, a debit entry is recorded on the left side of a T-account. This means that when a transaction occurs, the amount is recorded on the left side of the T-account, which is known as the debit side. This is consistent with the general rule that assets, expenses, and dividends have normal debit balances. On the other hand, liabilities, owner's equity, and revenues have normal credit balances, which means they are recorded on the right side of the T-account. Therefore, the correct answer is that a debit entry is recorded on the left side of a T-account.

Rate this question:

2
0
8.

Which accounts appear on which financial statement?
- A.
  
  Balance sheet- receivables, land, payables; Income statement- Revenues, supplies
- B.
  
  BS- cash, revenues, land; IS- expenses, payables
- C.
  
  BS- Cash, receivables, payables; IS- revenues, expenses
- D.
  
  BS- expenses, payables, cash; IS- revenues, receivables, land
Correct Answer
C. BS- Cash, receivables, payables; IS- revenues, expenses

Explanation
The balance sheet includes accounts such as cash, receivables, and payables, which represent the financial position of a company at a specific point in time. On the other hand, the income statement includes accounts such as revenues and expenses, which represent the company's financial performance over a period of time. Therefore, the correct answer is BS- Cash, receivables, payables; IS- revenues, expenses.

Rate this question:

1
0
9.

Which is the correct sequence for recording transactions and preparing financial statements?
- A.
  
  Ledger, trial balance, journal, financial statements
- B.
  
  Journal, ledger, trial balance, financial statements
- C.
  
  Financial statements, trial balance, ledger, journal
- D.
  
  Ledger, journal, trial balance, financial statements
Correct Answer
B. Journal, ledger, trial balance, financial statements

Explanation
The correct sequence for recording transactions and preparing financial statements is to first record the transactions in the journal, then transfer the information from the journal to the ledger, next prepare a trial balance to ensure that the debits and credits are equal, and finally prepare the financial statements based on the information in the ledger and trial balance.

Rate this question:

1
0
10.

The error of posting $500 as a $50 can be detected by:
- A.
  
  Totaling each account's balance in the ledger
- B.
  
  Dividing the out of balance amount by 2
- C.
  
  Dividing the out of balance amount by 9
- D.
  
  Examining the chart of accounts
Correct Answer
C. Dividing the out of balance amount by 9

Explanation
Dividing the out of balance amount by 9 can detect the error of posting $500 as $50 because if the error occurred, there would be a difference of $450 ($500 - $50) in the total balance. Dividing this difference by 9 would give a quotient of 50, indicating that the error was made in posting $450 to one account instead of another.

Rate this question:

2
0

Quiz Review Timeline +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

Current Version
Mar 21, 2023

Quiz Edited by
ProProfs Editorial Team
Dec 13, 2012

Quiz Created by
Lnwilcox

Basic Accounting Exam: Quiz! MCQ

A debit entry to an account.

Which account types normally have a credit balance?

An attorney performs services of $1,100 for a client and receives $400 cash with the remainder on the account. The journal entry for this would:

The list of accounts with their balances is the:

The basic summary device of accounting is the:

The beginning cash balance was $3,000. At the end of the period, the balance was $2,000. If total cash paid out during the period was 27,000, the number of cash receipts was:

In a double-entry accounting system:

Which accounts appear on which financial statement?

Which is the correct sequence for recording transactions and preparing financial statements?

The error of posting $500 as a $50 can be detected by: