Accounting Test

The Statement of Profit and Loss is also called the

• Balance Sheet

• Income Statement

• Statement of Cash Flows

• Statement of Financial Position

Which of the following is not a type of cash flows shown in the Cash Flow Statement?

• Operating cash flow

• Investing cash flow

• Accounting cash flow

• Financing cash flow

Which of the following is not a current asset?

• Cash

• Accounts receivable

• Inventory

• Property, plant, and equipment

What are the effects on the balance sheet when a company borrows a two-year bank loan of $1,000?

• $1,000 credit in current liabilities; $1,000 debit in current assets

• $1,000 credit in current liabilities; $1,000 debit in non-current assets

• $1,000 credit in non-current liabilities; $1,000 debit in current assets

• $1,000 credit in non-current liabilities; $1,000 debit in non-current assets

What happens to the balance sheet when a company makes sales of $500, of which $300 is paid in cash and $200 is sold on credit?

• $300 debit in cash; $200 debit in accounts receivable; $500 credit in retained earnings

• $300 credit in cash; $200 credit in accounts receivable; $500 debit in retained earnings

• $300 debit in cash; $200 debit in accounts payable; $500 credit in retained earnings

• $300 credit in cash; $200 credit in accounts payable; $500 debit in retained earnings

What happens to the balance sheet when a company pays salaries of $5,000?

• $5,000 credit in cash; $5,000 debit in accounts payable

• $5,000 credit in cash; $5,000 debit in retained earnings

• $5,000 debit in cash; $5,000 credit in retained earnings

• $5,000 credit in cash; $5,000 debit in accounts receivable

Which of the following is the correct formula to calculate operating income?

• Operating income = Revenue - Direct operating cost

• Operating income = Revenue - Indirect operating cost

• Operating income = Gross profit - Direct operating cost

• Operating income = Gross profit - Indirect operating cost

Given the following Balance Sheet extract, calculate the net profit on the Income Statement. (Assuming tax rate = 10% of operating profit)

• 67.0

• 25.0

• 22.5

• 33.5

Company A used $3,000 worth of office supplies this year but the costs were not paid for until next year. Which of the following is not a result of this transaction?

• An expense of $3,000 is recorded on this year's income statement

• There is a $3,000 credit in cash on the balance sheet

• An accrued expense of $3,000 is recorded as current liabilities on the balance sheet

• There is a $3,000 credit in office supplies on the balance sheet

Company B purchased an equipment for $600. The equipment has a useful life of 4 years and a scrap value of $50 at the end of year 4. What is the depreciation expense for year 1 (using straight line method)

• $137.5

• $150.0

• $50.0

• $122.5