Home » Quizzes » Accounting cycle » Multiple choice questions (MCQs) quiz Accounting cycle Multiple choice questions (MCQs) quiz Posted in: Accounting cycle (quizzes) By: Rashid Javed | Updated on: August 25th, 2024 /20 ABOUT THIS QUIZChapter: Accounting cycleQuiz type: Multiple choice questions (MCQs) quizNumber of questions: 20Estimated time required: 8 - 12 minutesYour result will be displayed at the end of the quiz. 1. The accounting cycle starts with the: preparation of ledger accounts preparation of trial balance analysis of business transaction preparation of adjusting entries 2. After proper analysis, the business transaction is recorded in journal in a: chronological order reverse chronological order random order none of the above 3. In accounting/bookkeeping, the term posting refers to: transfer of information from ledger to trial balance transfer of entries from journal to ledger preparation of financial statements from trial balance none of the above 4. Fast Company purchases land for $12,000. The payment for this purchase is made by issuing 1,200 shares of common stock of $10 each. The journal entry for this transaction would be: Land 12,000 Dr. and Cash 12,000 Cr. Land 12,000 Dr. and Accounts payable 12,000 Cr. Common stock 12,000 Dr. and Land 12,000 Cr. Land 12,000 Dr. and Common stock 12,000 Cr. 5. The collection or group of accounts in an organization is known as: general journal general ledger trial balance balance sheet 6. The right hand side of a T-account is termed as: debit side credit side income side expense side 7. How would you post the following journal entry to ledger?Rent expense $200 Dr.Cash $200 Cr. Cash account would be debited by $200 and rent expense account would be credited by $200 Rent expense account would be debited by $200 and A/C P.A account would be credited by $200 Cash account would be debited by $200 and loss account would be credited by $200 Rent expense account would be debited by $200 and cash account would be credited by $200 8. A credit may signify: an increase in a liability account a decrease in a liability account an increase in an asset account an increase in an expense account 9. A form or statement that lists the titles and balances of ledger accounts at a given date is known as: balance sheet income statement trial balance statement of retained earnings 10. The cash received from credit customers would be recorded by: debiting "cash account" and crediting "accounts payable account" debiting "cash account" and crediting "accounts receivable account" debiting "accounts payable account" and crediting "cash account" debiting "accounts receivable account" and crediting "cash account" 11. The trial balance in which total debits equal total credits provides a proof that: the ledger is in balance the transactions have been correctly analyzed and recorded in proper accounts the correct debit and credit balances have been computed for each account no transaction has been completely omitted during the posting process 12. Which of the following is used to compute the net income for a specific period? Balance sheet Statement of retained earnings Income statement Cash account 13. Which of the following is helpful in determining the financial position of the business at a specific date? Statement of cash flows Statement of retained earnings Asset accounts of the business Balance sheet (also known as statement of financial position) 14. A statement that shows the changes in the amount of retained earnings during a specific period is known as: statement of financial position statement of retained earnings statement of retained assets statement of retained liabilities 15. The amount of retained earnings at the end of a period is equal to: Retained earnings at the beginning of the period + Dividends declared – Net income Net income + Dividends declared – Retained earnings at the beginning of the period Retained earnings at the beginning of the period + Net income – Dividends declared Retained earnings at the beginning of the period + Net income – Operating expenses 16. Which one of the following is not a fixed asset? Machinery Plant Equipment Inventory 17. Which of the following is not an intangible asset? Goodwill Patent Prepaid expenses Copyright 18. Which of the following financial statements is generally prepared first? Balance sheet Statement of cash flows Income statement Statement of retained earnings 19. ABC is a profitable company. Which of the following journal entries would it make to close its income summary account? Credit income summary account and debit capital stock account Debit income summary account and credit capital stock account Debit income summary account and credit retained earnings account Credit income summary account and debit retained earnings account 20. Which of the following accounts is not closed to income summary account at the end of the accounting period? Accumulated depreciation Wages expenses Depreciation expenses Advertising expenses 0% Restart quiz Next » Help us grow by sharing our content ♡
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