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

The going concern assumption holds that a business will remain operational long enough to fulfill its obligations and complete its plans.

Question 2

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

Accepted Answer

Debit Salaries Expense; credit Salaries Payable

Answer

Accrued salaries are recorded by debiting Salaries Expense (increasing expenses) and crediting Salaries Payable (creating a liability).

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

Accounts receivable turnover = Net Credit Sales / Average Accounts Receivable and gauges collection efficiency.

Question 4

The concept of materiality in accounting means that:

Accepted Answer

Insignificant items may be handled in the most practical manner

Answer

Materiality allows minor items to be accounted for expediently when their omission or misstatement would not influence financial statement users.

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

With rising prices, FIFO assigns older (cheaper) costs to COGS, leaving newer (higher-priced) goods in ending inventory, resulting in higher income and inventory value.

Robert Half Assessment Test Practice Test

Robert Half Assessment Test Practice Test

Robert Half Assessment Test Core Accounting Principles 5