Robert Half Assessment Test Core Accounting Principles 3

Question 1

Which inventory costing method assumes the most recently purchased items are sold first?

Accepted Answer

LIFO

Answer

FIFO

Answer

Weighted average

Answer

Specific identification

Question 2

A $1,200 insurance premium was paid on October 1 for 12 months of coverage. How much is prepaid insurance on December 31?

Accepted Answer

$900

Answer

$300

Answer

$1,200

Answer

$600

Question 3

Which of the following transactions increases both total assets and total liabilities?

Accepted Answer

Borrowing money from a bank

Answer

Paying off a bank loan with cash

Answer

Issuing stock for cash

Answer

Collecting an account receivable

Question 4

Under GAAP, intangible assets with indefinite useful lives (like goodwill) are:

Accepted Answer

Tested annually for impairment instead of amortized

Answer

Amortized over 40 years

Answer

Amortized over their useful life

Answer

Expensed immediately when acquired

Question 5

A credit entry to Accounts Receivable indicates:

Accepted Answer

A customer paid their outstanding balance

Answer

A customer made a purchase on account

Answer

Revenue was earned

Answer

An expense was accrued

Question 6

Which of the following correctly describes working capital?

Accepted Answer

Current assets minus current liabilities

Answer

Total assets minus total liabilities

Answer

Long-term assets minus long-term liabilities

Answer

Cash plus accounts receivable

Question 7

The lower-of-cost-or-net-realizable-value rule for inventory is an application of which accounting principle?

Accepted Answer

Conservatism (prudence)

Answer

Revenue recognition principle

Answer

Full disclosure principle

Answer

Going concern principle