Practice Quiz

CPA Accountant Review Questions - Question List

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6. Jenny’s Bakery recently delivered a bad batch of cakes to a local restaurant. Jenny quickly refunded the cost of the cakes to the restaurant. Her accountant made a __________ to her Refunds of Sales account for this transaction:
  1. note
  2. debit
  3. credit
  4. cost adjustment
  5. deposit
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7. If Jenny’s Bakery purchased an insurance policy, assuming the accrual accounting method is still being used, when would the company report the cost of the policy as an expense?
  1. When Jenny signs the policy
  2. When payment is made
  3. When the bakery receives the benefits of the policy
  4. When the bakery receives payments from the insurance company
  5. When the invoice is received
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8. Common stock has a ________ balance and is a/an ______ to the Corporation.
  1. debit; liability
  2. credit; liability
  3. debit; asset
  4. credit; asset
  5. credit; equity
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9. Bart’s Brewskies saw sales of $50,000 in December-primarily due to New Year’s Eve celebrations. Bart determined that 30% of his sales are paid in cash, while the rest are billed for their brewskies. Of the money owed, 40% is paid December, while the remaining is paid the following month. What is the increase of Accounts Receivable on New Year’s Eve?
  1. $21,000
  2. $14,000
  3. $15,000
  4. $35,000
  5. $50,000
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10. Three key words used to describe the ethical responsibilities of accountants are:
  1. CPA’s, GAAP, AICPA
  2. Competence, objectivity, and confidentiality
  3. Reliability, integrity, and honesty
  4. Integrity, intelligence, and reliability
  5. Secrecy, intelligence, and reliability
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