CPB / BookKeeping Bookkeeping and Accounting 5

Question 1

Which of the following is an example of an adjusting entry?

Accepted Answer

Accruing wages earned but not yet paid

Answer

Accruing unpaid wages is an adjusting entry that recognizes an expense incurred before cash payment is made.

Question 2

Gross profit is calculated as:

Accepted Answer

Net sales minus cost of goods sold

Answer

Gross profit equals net sales revenue minus the cost of goods sold, before deducting operating expenses.

Question 3

Which internal control procedure helps prevent check fraud?

Accepted Answer

Requiring dual signatures on checks above a threshold

Answer

Requiring two authorized signatures on large checks makes it harder for one person to commit fraud undetected.

Question 4

The going concern assumption means that:

Accepted Answer

A business will operate indefinitely into the future

Answer

The going concern assumption presumes the business will continue operating long enough to fulfill its obligations and objectives.

Question 5

Which of the following would appear on a balance sheet?

Accepted Answer

Notes Payable

Answer

Notes Payable is a liability account that appears on the balance sheet, representing amounts owed on promissory notes.

CPB / BookKeeping Practice Test