DSST Principles of Financial Accounting 2

Question 1

Which of the following is a current asset?

Accepted Answer

Accounts Receivable

Answer

Accounts receivable is a current asset because it is expected to be converted to cash within one year.

Question 2

Under the straight-line depreciation method, how is annual depreciation calculated?

Accepted Answer

(Cost − Salvage Value) ÷ Useful Life

Answer

Straight-line depreciation spreads the depreciable cost evenly over the asset's useful life using (Cost − Salvage Value) ÷ Useful Life.

Question 3

When a company pays a previously recorded account payable, which accounts are affected?

Accepted Answer

Debit Accounts Payable; Credit Cash

Answer

Paying an account payable reduces the liability (debit Accounts Payable) and reduces cash (credit Cash).

Question 4

Which accounting concept requires that expenses be recorded in the same period as the revenues they helped generate?

Accepted Answer

Matching Principle

Answer

The matching principle ensures expenses are recognized in the period they help generate revenue, enabling accurate profit measurement.

Question 5

A trial balance is prepared primarily to verify what?

Accepted Answer

That total debits equal total credits

Answer

A trial balance lists all ledger accounts and their balances to confirm that total debits equal total credits before financial statements are prepared.

DSST - DANTES Subject Standardized Tests Practice Test

DSST - DANTES Subject Standardized Tests Practice Test

DSST Principles of Financial Accounting 2