Chart Of Accounts: Trivia Quiz!
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Have you ever heard of the chart of accounts? A chart of accounts is a list of financial accounts set up, usually by an accountant, for a corporation and available for the bookkeeper's use for recording transactions in the general ledger. Accounts may be added in the charts as needed and not be eliminated, especially if a transaction was posted to the account. Take this quiz and find out if your knowledge of the chart of accounts adds up.
Questions and Answers
- 1.
The chart of accounts has a list of:
- A.
Names of customers and suppliers
- B.
General ledger account names and numbers
- C.
Names of each inventory item
Correct Answer
B. General ledger account names and numbersExplanation
The chart of accounts is a comprehensive list of all the general ledger account names and numbers used in a company's accounting system. It provides a systematic way to organize and categorize financial transactions, making it easier to track and analyze financial data. The chart of accounts helps in generating accurate financial statements, identifying specific accounts for recording transactions, and facilitating efficient bookkeeping and reporting processes. It does not include the names of customers and suppliers or the names of inventory items, as those are typically managed separately in other accounting records.Rate this question:
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- 2.
Name the five main categories that the ledger accounts are grouped under:-
- A.
Assets, credit cards, liabilities, money, contact cards
- B.
Assets, production, bank register, purchases, sales
- C.
Assets, liabilities, equity, income, expenses
Correct Answer
C. Assets, liabilities, equity, income, expensesExplanation
The correct answer is assets, liabilities, equity, income, and expenses. These five categories are the main classifications for ledger accounts. Assets represent the resources owned by a company, such as cash, inventory, or property. Liabilities are the obligations or debts owed by the company, such as loans or accounts payable. Equity represents the ownership interest in the company, including stockholders' equity and retained earnings. Income refers to the revenue or earnings generated by the company, while expenses are the costs incurred in running the business. These categories help organize and track the financial transactions of a company.Rate this question:
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- 3.
Which category usually has (but not always!) the most accounts?
- A.
The banking corporation
- B.
The 10 richest people of the world
- C.
Expenses
Correct Answer
C. ExpensesExplanation
Expenses usually have the most accounts because they encompass a wide range of financial transactions, including bills, utilities, rent, and other day-to-day costs. Unlike the banking corporation or the 10 richest people of the world, expenses are common to everyone and are incurred regularly. While it is not always the case, expenses tend to have a higher number of accounts due to their widespread nature and the frequency at which they occur in people's lives.Rate this question:
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- 4.
What equation does the chart of accounts tie-in with?
- A.
Accounting equation
- B.
Wave equation
- C.
The origin of complex numbers
Correct Answer
A. Accounting equationExplanation
The chart of accounts is a structured list of all the accounts used by a company to record its financial transactions. It categorizes accounts into different types such as assets, liabilities, equity, revenue, and expenses. The accounting equation, also known as the balance sheet equation, is the fundamental equation in accounting that states that assets are equal to liabilities plus equity. The chart of accounts ties in with the accounting equation because it helps organize and classify the various accounts that make up the equation and provides a framework for recording and reporting financial information accurately.Rate this question:
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- 5.
You can split a category into manageable sub-groups?
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
It is possible to split a category into manageable sub-groups. This can be done by dividing the category into smaller sections or subsets based on certain criteria or characteristics. By doing so, it becomes easier to organize and analyze the data within the category, making it more manageable and understandable.Rate this question:
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- 6.
Which category do you think an insurance loan would go under?
- A.
Assets
- B.
Liabilities
- C.
Expenses
Correct Answer
B. LiabilitiesExplanation
An insurance loan would fall under the category of liabilities. This is because a loan represents a financial obligation or debt that the insurance company owes to the lender. Liabilities are the debts or obligations of a company that need to be settled in the future, and loans are a common form of liability for many businesses, including insurance companies.Rate this question:
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- 7.
Under which category do you think a new, high cost computer would go ?
- A.
Expenses
- B.
Income
- C.
Assets
Correct Answer
C. AssetsExplanation
A new, high cost computer would be categorized as an asset. Assets are items of value that a company or individual owns and can use to generate future economic benefits. A computer is a tangible asset that can be used in business operations and has a significant cost associated with it. It is considered an investment and is expected to provide a return or benefit over its useful life. Therefore, categorizing it as an asset is appropriate.Rate this question:
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- 8.
Which category do you think business Travel & Accommodation costs would go under?
- A.
Expenses
- B.
Liabilities
- C.
Equity
Correct Answer
A. ExpensesExplanation
Business Travel & Accommodation costs would go under the category of Expenses. This is because expenses refer to the costs incurred by a business in its day-to-day operations. Business Travel & Accommodation costs are considered as operational expenses as they are necessary for the business to function and are directly related to its activities. These costs are typically deducted from the revenue to calculate the net income or profit of the business.Rate this question:
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- 9.
Which category do you think wages would go under?
- A.
Equity
- B.
Expenses
- C.
Income
Correct Answer
B. ExpensesExplanation
Wages would go under the category of expenses because they represent the cost incurred by a company to compensate its employees for their work. Wages are a regular expenditure for businesses and are deducted from the company's revenue to calculate its net income. Expenses include various costs necessary for running a business, such as salaries, utilities, rent, and supplies. Therefore, categorizing wages as expenses is logical and aligns with standard accounting practices.Rate this question:
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- 10.
Which category do you think the website development costs would go under?
- A.
Assets
- B.
Equity
- C.
Expenses
Correct Answer
C. ExpensesExplanation
Website development costs would typically be categorized as expenses. This is because these costs are considered to be incurred for the purpose of generating revenue in the current period, rather than being long-term assets or investments. Expenses are recognized on the income statement and are deducted from revenue to calculate net income.Rate this question:
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- 11.
A customer pays a deposit for work not yet started. Where does this go?
- A.
Income
- B.
Assets
- C.
Equity
Correct Answer
B. AssetsExplanation
When a customer pays a deposit for work that has not yet started, it is considered as a liability for the company. This is because the company owes the customer the service or product that they have paid for in advance. Therefore, the correct answer is Assets, as the deposit received will be recorded as a current liability in the company's balance sheet until the work is completed and the liability is fulfilled.Rate this question:
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- 12.
You buy products (stock) to sell to customers – what category do stock purchases go under?
- A.
Expenses
- B.
Liabilities
- C.
Assets
Correct Answer
C. AssetsExplanation
Stock purchases go under the category of assets because they represent the inventory or goods that a company owns and intends to sell to customers. Assets are resources or items of value that a company owns and can be used to generate future economic benefits. Since stock purchases have the potential to generate revenue for the company, they are considered as assets on the balance sheet.Rate this question:
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- 13.
The business owner withdraws business funds for personal use. What category is this?
- A.
Equity
- B.
Liabilities
- C.
Expenses
Correct Answer
A. EquityExplanation
When the business owner withdraws business funds for personal use, it is categorized as Equity. Equity represents the owner's interest in the business and includes the owner's personal withdrawals. It reflects the owner's claim on the assets of the business and is separate from liabilities and expenses, which represent the obligations and costs of the business.Rate this question:
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Current Version
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Mar 21, 2023Quiz Edited by
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Oct 18, 2018Quiz Created by
Cathy Bardy
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