Bookkeeping and Accounting Flashcards
7 cards from real CPB / BookKeeping practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Bookkeeping and Accounting flashcards as text
Which of the following is an example of an adjusting entry?
Answer: Accruing wages earned but not yet paid
Accruing unpaid wages is an adjusting entry that recognizes an expense incurred before cash payment is made.
Gross profit is calculated as:
Answer: Net sales minus cost of goods sold
Gross profit equals net sales revenue minus the cost of goods sold, before deducting operating expenses.
Which internal control procedure helps prevent check fraud?
Answer: Requiring dual signatures on checks above a threshold
Requiring two authorized signatures on large checks makes it harder for one person to commit fraud undetected.
The going concern assumption means that:
Answer: A business will operate indefinitely into the future
The going concern assumption presumes the business will continue operating long enough to fulfill its obligations and objectives.
Which of the following would appear on a balance sheet?
Answer: Notes Payable
Notes Payable is a liability account that appears on the balance sheet, representing amounts owed on promissory notes.
What is the effect of paying a previously recorded accounts payable balance?
Answer: Decreases liabilities and decreases assets
Paying an accounts payable reduces the liability (A/P) and reduces the asset Cash by equal amounts.
Which accounting principle requires that expenses be recognized in the same period as the revenues they helped generate?
Answer: Matching Principle
The Matching Principle requires expenses to be recorded in the period when the related revenue is earned.