Final Exam Preparation Test 2
Part A
Quiz – Multiple Choice Questions
1. The two broad branches into which accounting is divided are:
a. Company and partnership
b. Management and financial
c. Taxation and audit
d. Commercial and non-commercial
2. Select the incorrect statement from the following:
a. The liability of shareholders to contribute to the debts of an insolvent company is limited
b. A sole proprietorship is an accounting entity
c. Individual partners are personally liable for partnership debts
d. Partnerships are regarded as separate legal entities
3. Which of the following is not normally an economic decision?
a. Buying household groceries
b. Exchanging goods at a swap meet
c. Booking a holiday over the Internet
d. Choosing a marriage partner
4. Maintaining a satisfactory relationship between an entity’s resource inputs and its output of
product or services is referred to as:
a. Planning
b. Efficiency
c. Organising
d. Effectiveness
5. If there are no drawings and no contributions of capital, a profit could be earned in any
accounting period if and only if:
a. Total assets exceed total liabilities
b. Total assets increase during the period
c. Total liabilities increase during the period
d. Net assets increase during the period
6. From the point of view of an entity, a person or business entity to whom a debt is owed is
known as a:
A. Debtor
B. Creditor
C. Debitor
D. Bank
, 7. Each balance day adjustment should
a. Affect the income statement only
b. Affect the balance sheet only
c. Affect either the income statement or the balance sheet
d. Have one effect on the profit & loss statement and the other on the balance sheet
8. The source document for a cash sale could be a:
a. Purchase order
b. Credit card slip
c. Cheque but
d. Credit note
9. A deposit received in advance by XYZ Enterprise for services not yet supplied can be
initially recorded by XYZ in a liability account called:
a. Sales
b. Mortgage
c. Unearned income
d. Expenses payable
10. Which of the following is related to tax in Australia?
a. GST
b. PAYG
c. Payroll Tax
d. All of the above
11. A credit entry is made to:
a. Decrease an expense, increase income, and increase equity
b. Decrease an asset, increase a liability, and decrease equity
c. Increase an asset, decrease a liability, and decrease equity
d. Decrease an asset, decrease a liability, and increase equity
12. Under the cash approach to profit measurement income is recorded in the accounting period
when:
a. Cash is received
b. Goods are sold or services performed
c. A contract is signed
d. An order is placed
13. The accounting entry when income is earned on credit is:
a. Debit cash, credit income
b. Debit accounts receivable, credit income
c. Debit income, credit accounts payable
d. Debit income, credit accounts receivable
14. A trial balance will disclose which of these errors?
a. Recording a transaction twice
b. Recording an amount on the right side of the wrong account
c. Recording a debit as a credit
d. Omitting a transaction
Part A
Quiz – Multiple Choice Questions
1. The two broad branches into which accounting is divided are:
a. Company and partnership
b. Management and financial
c. Taxation and audit
d. Commercial and non-commercial
2. Select the incorrect statement from the following:
a. The liability of shareholders to contribute to the debts of an insolvent company is limited
b. A sole proprietorship is an accounting entity
c. Individual partners are personally liable for partnership debts
d. Partnerships are regarded as separate legal entities
3. Which of the following is not normally an economic decision?
a. Buying household groceries
b. Exchanging goods at a swap meet
c. Booking a holiday over the Internet
d. Choosing a marriage partner
4. Maintaining a satisfactory relationship between an entity’s resource inputs and its output of
product or services is referred to as:
a. Planning
b. Efficiency
c. Organising
d. Effectiveness
5. If there are no drawings and no contributions of capital, a profit could be earned in any
accounting period if and only if:
a. Total assets exceed total liabilities
b. Total assets increase during the period
c. Total liabilities increase during the period
d. Net assets increase during the period
6. From the point of view of an entity, a person or business entity to whom a debt is owed is
known as a:
A. Debtor
B. Creditor
C. Debitor
D. Bank
, 7. Each balance day adjustment should
a. Affect the income statement only
b. Affect the balance sheet only
c. Affect either the income statement or the balance sheet
d. Have one effect on the profit & loss statement and the other on the balance sheet
8. The source document for a cash sale could be a:
a. Purchase order
b. Credit card slip
c. Cheque but
d. Credit note
9. A deposit received in advance by XYZ Enterprise for services not yet supplied can be
initially recorded by XYZ in a liability account called:
a. Sales
b. Mortgage
c. Unearned income
d. Expenses payable
10. Which of the following is related to tax in Australia?
a. GST
b. PAYG
c. Payroll Tax
d. All of the above
11. A credit entry is made to:
a. Decrease an expense, increase income, and increase equity
b. Decrease an asset, increase a liability, and decrease equity
c. Increase an asset, decrease a liability, and decrease equity
d. Decrease an asset, decrease a liability, and increase equity
12. Under the cash approach to profit measurement income is recorded in the accounting period
when:
a. Cash is received
b. Goods are sold or services performed
c. A contract is signed
d. An order is placed
13. The accounting entry when income is earned on credit is:
a. Debit cash, credit income
b. Debit accounts receivable, credit income
c. Debit income, credit accounts payable
d. Debit income, credit accounts receivable
14. A trial balance will disclose which of these errors?
a. Recording a transaction twice
b. Recording an amount on the right side of the wrong account
c. Recording a debit as a credit
d. Omitting a transaction
