Practice Quiz

CPA Accountant Review Questions - Question List

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11. Bart’s Brewskies has grown beyond its wildest dreams. They are now a corporation and have hired an accountant. Their income statement is now showing a net income. How is this income shown on the Statement of Retained Earnings?

I. It increases retained earnings.
II. It is shown as dividends paid to shareholders.
III. It does not impact the Statement of Retained Earnings.
  1. Only statement I is correct.
  2. Only statement II is correct.
  3. Only statement III is correct.
  4. Both statement I and II could be correct.
  5. None of the statements are correct.
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12. During 2009, Bart’s Brewskies saw a jump in accounts receivables. It went from $10,000 at year end in 2008 to $20,000 at year end in 2009. With the introduction of his newest brewskie, chocolate beer, Bart saw his sales skyrocket. In 2009, his sales were $120,000. How much cash did Bart’s Brewskies take in for 2009?
  1. $105,000
  2. $120,000
  3. $130,000
  4. $140,000
  5. $110,000
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13. Doug’s Doohickeys sells hardware. His sales have finally reached $1,000,000 annually after years of hard work. Now his accountant has discovered a mistake-Doug misclassified a $2 expense several months ago. His accountant decides to ignore it. What accounting concept does he use to justify this?
  1. The going concern concept
  2. The materiality concept
  3. The money measurement concept
  4. The matching concept
  5. The time is money concept
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14. In the statement of owner’s equity, owner’s equity or capital is calculated using:
  1. Gross income
  2. The positive or negative cash flow figure from the statement of cash flows
  3. Assets
  4. Total income from operating activities
  5. Net income
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15. Another name for an income statement is a:
  1. Statement of cash flows
  2. Balance sheet
  3. Operating statement
  4. Statement of owner’s equity
  5. Profit & loss statement
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