Robert Half Assessment Test Accounting 3

Question 1

A bank reconciliation is prepared to:

Accepted Answer

Reconcile the difference between book and bank cash balances

Answer

Record payroll transactions

Answer

Calculate accounts receivable aging

Answer

Prepare the income statement

Question 2

Which depreciation method results in the highest depreciation expense in the early years of an asset's life?

Accepted Answer

Double-declining balance

Answer

Straight-line

Answer

Units of production

Answer

Sum-of-years'-digits — equally as the straight line

Question 3

Petty cash is replenished when the fund runs low. The journal entry to replenish it includes:

Accepted Answer

Debits to expense accounts and a credit to Cash

Answer

A debit to Cash and a credit to Petty Cash

Answer

A debit to Petty Cash and a credit to Accounts Payable

Answer

Debits to expense accounts and a credit to Petty Cash

Question 4

What is the purpose of adjusting entries?

Accepted Answer

To update account balances before financial statements are prepared

Answer

To close temporary accounts at year-end

Answer

To correct errors in the trial balance

Answer

To record cash receipts and payments

Question 5

Under the allowance method for bad debts, writing off an uncollectible account:

Accepted Answer

Has no effect on net income or net accounts receivable

Answer

Reduces net income

Answer

Increases the allowance account

Answer

Decreases total assets

Question 6

Which of the following best describes a capital expenditure?

Accepted Answer

A cost that extends an asset's useful life or adds new capability

Answer

A routine repair that maintains an asset's current condition

Answer

An expense that benefits only the current period

Answer

A payment made to shareholders

Question 7

The current ratio is calculated as:

Accepted Answer

Current Assets / Current Liabilities

Answer

Total Assets / Total Liabilities

Answer

Net Income / Total Assets

Answer

Current Liabilities / Current Assets