Robert Half Assessment Test Core Accounting Principles 5

Question 1

Which of the following best describes the going concern assumption?

Accepted Answer

A business is expected to continue operating indefinitely

Answer

A business will report assets at their liquidation value

Answer

Revenue must be recognized when cash is received

Answer

Financial statements must be prepared monthly

Question 2

An adjusting entry to record accrued salaries expense at year-end would:

Accepted Answer

Debit Salaries Expense; credit Salaries Payable

Answer

Debit Salaries Payable; credit Salaries Expense

Answer

Debit Cash; credit Salaries Expense

Answer

Debit Salaries Expense; credit Cash

Question 3

Which financial ratio measures how many times a company collects its average accounts receivable balance during a period?

Accepted Answer

Accounts receivable turnover

Answer

Current ratio

Answer

Debt-to-equity ratio

Answer

Gross profit margin

Question 4

The concept of materiality in accounting means that:

Accepted Answer

Insignificant items may be handled in the most practical manner

Answer

All transactions must be recorded regardless of size

Answer

Only tangible assets are reported

Answer

Financial statements must be audited annually

Question 5

Under FIFO inventory costing during a period of rising prices, compared to LIFO, a company will report:

Accepted Answer

Higher net income and higher inventory value

Answer

Lower net income and lower inventory value

Answer

Higher net income and lower inventory value

Answer

Lower net income and higher inventory value

Question 6

Which of the following would be recorded as a capital expenditure rather than a revenue expenditure?

Accepted Answer

Installing a new engine that extends the truck's useful life by 5 years

Answer

Replacing worn-out tires on a delivery truck

Answer

Paying for annual vehicle registration

Answer

Routine oil change on company vehicles

Question 7

On the indirect method cash flow statement, a decrease in accounts payable is shown as a:

Accepted Answer

Subtraction from net income

Answer

Addition to net income

Answer

Investing cash inflow

Answer

Financing cash inflow