CPB / BookKeeping Bookkeeping Cycle 3

Question 1

Which document is used as the source for journalizing a credit sale transaction?

Accepted Answer

Sales invoice

Answer

A sales invoice is the source document that supports recording a credit sale in the journal.

Question 2

Equipment costing $50,000 with a $5,000 salvage value is depreciated over 5 years using straight-line. What is the annual depreciation?

Accepted Answer

$9,000

Answer

Annual depreciation = ($50,000 − $5,000) ÷ 5 years = $9,000 per year.

Question 3

When a business collects cash in advance for services not yet performed, it records:

Accepted Answer

A debit to Cash and a credit to Unearned Revenue

Answer

Cash received before services are performed creates a liability (Unearned Revenue) until the service is delivered.

Question 4

The ledger account that accumulates depreciation over an asset's life is called:

Accepted Answer

Accumulated Depreciation

Answer

Accumulated Depreciation is a contra-asset account that grows each period as depreciation expense is recorded.

Question 5

Which trial balance is prepared AFTER adjusting entries but BEFORE financial statements?

Accepted Answer

Adjusted trial balance

Answer

The adjusted trial balance reflects all end-of-period adjustments and is used to prepare the financial statements.

CPB / BookKeeping Practice Test