ACCOUNTING QUIZ BEE (ABM Cup)

What refers to the money that is kept in a savings or current account?

• Cash on Hand

• Cash in Bank

• Checks

• Compensating Balance

Accounting information must be comprehensible and accountants should prepare financial statements expressed in form and properly classified with terminologies adapted to the users' range of understanding. What quality of accounting information does it describe?

• Comprehensible

• Completeness

• Reliability

• Understandability

Which of the following comes first in the accounting cycle?

• Preparation of financial statements

• Adjusting entries

• Posting transactions to ledgers

• Closing entries

These are the main revenue-producing activities of a business

• Financing activities

• Investing activities

• Operating activities

• Franchising activities

Evidence that would not help with determining the effects of a transaction on the accounts would be a/n ________.

• Cash register sales tape

• Bill

• Advertising brochure

• Check

VAT Payable is the tax due when output tax is greater than input tax.

• True

• False

• Cannot be determined

Arrah prepares the monthly financial statements. Which of the following violates the accrual basis principle?

• A portion of the salary payments made this month are not recognized as expense because some of the work was done last month.

• The premium on a six-month insurance policy is charged immediately to expense.

• Expenses for the period exceed revenues.

• The cost of advertising done during the month is charged to expense even though no payment is due for 60 days.

A part of the accounting cycle is the recording of accrued expenses and accrued income. Which of the following relates to accrued expense?

• Deferred charges to expense

• Result from payment before services are received.

• Result from services received before payment

• Are generally paid in services rather than cash

Gain on sale will only be recognized if the proceeds of sale exceed the book value of the disposed asset.

• True

• False

• Cannot be determined.

DEF Company purchased inventory on account with terms 2/10, n/30. It paid the amount owed within 10 days and recorded the following entry:

Account A (Dr) 800

Account B (Cr) 784

Account C (Cr) 16

Given this entry and assuming that DEF Company uses a periodic inventory system, what would be the nature of Account C

• Accounts Payable

• Cash

• Inventory

• Purchase Discounts