Accounting Technician II Practice Test

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• Which concept describes the need to manage restricted resources in an organization?
• Which statement best describes capital expenditure?
• Which sector is described as addressing social, environmental, or cultural issues and providing services to underserved populations?
• How do you calculate interest expense using the effective interest rate method?
• What is a primary purpose of disclosure in financial reporting?
• A reversing entry is typically made at the beginning of a period to achieve what effect?
• Funds with no restriction on use are described as what?
• Which accounting entry increases a liability or owners' equity and may be recorded on the right side of a T-account?
• Which item is an equity account?
• Which financial statement shows the net result of revenues and expenses over a period?
• How do you calculate gross margin percentage?
• Which describes the purpose of reconciliations in internal controls?
• What is the primary purpose of the cash flow statement?
• In CVP analysis, which item is not a standard component?
• What term refers to money owed to the business by its creditors (suppliers, vendors, and other service providers)?
• A federal government grant for low-income housing is an example of what type of funding?
• Assets expected to be held for longer than a year
• What is the purpose of footnotes in financial statements?
• What term describes debts and obligations of a company?
• Which statement best distinguishes capital expenditure from revenue expenditure?
• Which of the following is a liability?
• In double-entry accounting, which side increases an asset account?
• A company purchases equipment costing 25,000 with 5,000 cash down and 20,000 financed by a note payable. How is this recorded?
• Which term describes costs that do not change with production levels in the short term, such as rent or lease payments?
• Which term refers to a group of closely related clerical operations that form a subunit of a system?
• How can tax accounting differ from financial reporting?
• Any resource that is owned by a company
• How is working capital calculated and what does it indicate?
• Which organization develops and issues accounting and financial reporting standards for US state and local government?
• Shows how much a business owns (assets), owes (liabilites), and the amount that is left over for its owners (owners equity) at a point in time
• Which of the following is an example of an accrual?
• What triggers impairment under IAS 36?
• Which statement correctly distinguishes gross profit from net profit?
• Which financial analysis is commonly used to evaluate cash flows for a road project?
• Which entity is described as the government, whose purpose is to provide public goods and services, maintain order, protect citizens, and facilitate economic growth?
• What is the primary purpose of ratio analysis in financial statements?
• What are essential internal controls to prevent fraud?
• How is the cash conversion cycle measured?
• Which expression correctly represents the equity equation in accounting?
• Which accounting approach provides a view of the financial activities and position of the entire government entity by consolidating information from all funds into a single set of financial statements?
• Which term describes expenses that vary in proportion to changes in sales or production?
• Which are the key components of cost-volume-profit analysis?
• Which of the following is an expense?
• Which statement best describes IFRS and US GAAP revenue recognition guidance?
• The total of all costs associated with producing your products or services
• Which term is a listing of all the accounts used in the general ledger?
• In double-entry accounting, what is the effect of debits and credits on assets, liabilities, and equity?
• GNP stands for which macroeconomic measure?
• Which item is a typical investing activity?
• What is the purpose of an audit trail?
• Liabilities due after one year are called which?
• How is depreciation calculated using the straight-line method?
• What is materiality in accounting?
• Which entry increases an asset or expense and may be recorded on the left side of a T-account?
• In IFRS 16, which balance sheet item represents the lessee's right to use the leased asset?
• Which term refers to the business position where total revenue exceeds total expenses?
• Which donor restriction applies to a donation designated for scholarships at a university?
• What does GAAP stand for in the material?
• Which term describes assets that are expected to be consumed within one year?
• Under the revaluation model, how is an increase in asset value generally treated?
• Which function involves assisting in government budget development and monitoring, with accountants tracking expenditures and revenues to ensure fiscal responsibility?
• Which are the five broad categories used to classify accounts?
• Which statement about account balances is true?
• Which area involves establishing internal controls to safeguard financial assets and coordinating with auditors for transparency and accountability?
• Which journal entry records wages earned but not paid by year-end?
• Which statement best describes financing activities?
• What is the main purpose of a reversing entry in accounting?
• What is the annual depreciation expense under straight-line method for an asset with cost 100,000, salvage value 10,000, useful life 9 years?
• When translating foreign currency monetary items at year-end, what is a common approach?
• What is the purpose of the allowance for doubtful accounts and how is bad debt expense recorded?
• What is the difference between capitalizing a cost and expensing a cost?
• Which function is primarily responsible for overseeing grant operations and ensuring funds are used in accordance with reporting requirements?
• State gasoline tax may be targeted at highway construction and maintenance. This funding is best described as what?
• Under IAS 36, impairment loss is determined by the recoverable amount, which is the higher of which values?
• What is the effect of choosing a depreciation method on the financial statements?
• Why is consistency important in accounting?
• Which funding source relies on donations, grants, and fundraising, with potential income from social enterprises or charges for services?
• What is the primary purpose of the general ledger?
• Not-for-profit organizations are typically governed by which bodies?
• How should you adjust prepaid expenses at year-end?
• Present value is a measure of the current value of a sum of money to be received in the future, using a specified rate.
• How does the materiality principle affect financial reporting?
• Which accounting type is used for government-owned utilities and other revenue-generating activities?
• Which funding source for government involves taxation, fees from citizens and businesses, and borrowing through issuing bonds or receiving loans?
• How should bad debts be presented in the financial statements?
• What is the purpose of closing entries in the accounting cycle?
• Which area involves managing and reconciling government funds and overseeing grant-related financial operations including reporting requirements?
• Net income is best described as
• Which term refers to the amount of money a company receives from selling goods or providing services?
• Which of the following best describes the purpose of ratio analysis in financial statements?
• What is the measurement of decline in the worth of an asset?
• Which accounting approach provides a broad perspective on the government's financial position, including statements of net position and activities, prepared on an accrual basis?
• If total debits exceed total credits by 350, what is the balance?
• ROI is a metric used to measure what?
• What is the equation for equity?
• What area focuses on establishing and maintaining internal controls to safeguard assets and coordinating with auditors to provide necessary information and support?
• Which body publishes GAAP in the UK?
• In double-entry accounting, which side increases a liability or owners' equity account?
• Short-term liabilities are due within how long?
• What is the primary purpose of a trial balance in the accounting cycle?
• What are some key objectives of working capital management?
• Which term describes a period at the end of which financial statements are prepared?
• Under IFRS 16, how is a lease recognized on the lessee's balance sheet?
• A contribution to your university is typically what type of donation?
• Under accrual basis accounting, when are revenues and expenses recognized compared to cash basis?
• Which is an example of a fixed cost?
• Which term refers to money owed by customers to the business?
• Which is the correct journal entry to record depreciation expense?
• What is a contra account?
• What is a bank reconciliation and why is it important?
• Which of the following costs is typically considered variable with respect to production volume?
• Which account is a contra-asset that reduces accounts receivable?
• Which statement describes indirect taxes in accounting context?
• Which term refers to records and procedures that relate to assembling, recording, and reporting financial information and that also provide internal controls?
• Which statement describes a perpetual inventory system?
• Which statement about FIFO and LIFO inventory valuation is true?
• A trial balance is best described as
• Which account is typically a contra asset to Accounts Receivable?
• Which accounting type is used for government-owned business activities operated similarly to commercial enterprises, such as utilities and transportation systems?
• Which accounting focus is used for tracking financial information for specific funds or account groups?
• What is the name of the record that lists all accounts used by a business?
• Which function analyzes financial data to identify trends and provide insights to decision-makers?
• Which of the following is an asset?
• Which accounting approach is used when resources are restricted for particular activities or purposes?
• What term refers to the collection of accounts, commonly known as the general ledger?
• Which entity has a board of directors and trustees that make decisions on behalf of the organization?
• Assets that are expected to be consumed within a year
• Outflows from operations are recorded as which type of costs?
• What term refers to money owed to the business by its debtors (clients and customers) and is recorded as an asset on the balance sheet?
• Can an account have multiple balances?
• Which of the following is an example of operating expenses?
• What is the book of entry where transactions are recorded in chronological order?
• Which item is not an asset?
• What term describes a payment of profits distributed to shareholders?
• A listing of all the accounts used in the general ledger of business
• The accounts are classified into three categories: Liabilities, Assets, and which other category?
• Which of the following is an example of a fixed expense?
• Under IFRS 15, revenue is recognized when control of the goods or services transfers to the customer for the amount the entity expects to be entitled to.
• When translating monetary items at year-end, which rate is typically used for monetary items?
• Which statement best describes equity?
• If a company borrows cash from a bank, what is the effect on the accounting equation?
• What criterion determines whether an accounting item requires disclosure under materiality?
• Which is a typical footnote disclosure?
• In accounting, equity represents what?
• What is the purpose of variance analysis in budgeting?
• Which accounting principle requires expenses to be recorded in the same period as the related revenues?
• Which term describes costs incurred by a company for revenue generation?
• Which area focuses on ensuring funds are used effectively by overseeing grants and the associated reporting requirements?
• Closing entries serve to transfer balances and prepare for the next period; which balances are transferred?
• Which term describes the broad perspective on a government's financial performance, including statements of net position and activities, prepared on the accrual basis?
• Which term best describes the process of preparing accurate and timely financial statements and reports in government accounting?
• Accruals are amounts that are unaccounted for at the end of the accounting period. These can be expenses that have been incurred or revenue that has been earned. But are not yet recorded in the account
• Refers to the total amount that is moving in and out of your business
• In most businesses, who are the primary decision-makers?
• Which funding source involves sales of goods and services, investments, loans, and issuing stocks or bonds?
• Which term describes assets that are expected to be held for longer than a year?
• How are balances determined in an account?
• If gross profit is 40,000 and net sales are 200,000, what is the gross margin percentage?
• Which type of organization is typically driven by market forces and relatively agile in decision-making?
• Which statement describes deferred revenue?
• In a for-profit business, who are the primary decision-makers?
• What is the stated primary purpose of government as described in the material?
• Why are ethical standards essential in accounting?
• Which is an example of a prepayment?
• During inflationary periods, which inventory valuation method typically results in the highest cost of goods sold (COGS)?
• Which responsibility ensures financial activities comply with laws, regulators, and policies, requiring staying informed of regulatory changes and adjusting accordingly?
• In double-entry bookkeeping, how many accounts are affected in a typical transaction?
• Explain accrued revenue and deferred revenue with examples.
• If a revaluation increases an asset’s value, where might the surplus be recorded?
• Under IFRS 15, revenue is recognized when control transfers to the customer for the amount the entity expects to be entitled to.
• Which organization develops the standards for US state and local government accounting?
• How should a warranty provision be recognized and measured?
• Which statement is true about restricted resources?
• Expenses incurred for activities not directly related to the production of goods or services are best described as?
• What is the purpose of a business according to the material?
• In a T-account, which side is used to record increases to liability accounts?
• Which term refers to money owed to suppliers and service providers?
• Under accrual accounting, when is revenue recognized if it has not yet been billed or collected?