CPB / BookKeeping Bookkeeping and Accounting 4

Question 1

Which type of account is closed at the end of an accounting period?

Accepted Answer

Revenue and expense accounts

Answer

Revenue and expense accounts (temporary accounts) are closed to Retained Earnings or Owner's Capital at period end to reset their balances.

Question 2

The straight-line depreciation method allocates cost:

Accepted Answer

In equal amounts each year

Answer

Straight-line depreciation divides the depreciable cost equally across each year of the asset's useful life.

Question 3

A credit to Accounts Payable indicates:

Accepted Answer

A purchase made on credit, increasing the amount owed

Answer

Crediting Accounts Payable increases this liability account, reflecting an amount owed to suppliers for credit purchases.

Question 4

What is a contra account?

Accepted Answer

An account with a balance that is opposite to its related account's normal balance

Answer

A contra account carries a balance opposite to its paired account (e.g., Accumulated Depreciation offsets the asset Equipment).

Question 5

Which document is the source for recording a cash sale?

Accepted Answer

Sales invoice or cash register receipt

Answer

A sales invoice or cash register receipt is the source document evidencing a cash sale transaction.

CPB / BookKeeping Practice Test