Accounting Technician II Practice Test

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