NYC Accountant Exam Questions With Correct
Answers (Verified Answers) Plus Rationales
2026 Q&A | Instant Download Pdf
1. Which financial statement reports a company’s financial position
at a specific point in time?
A. Income statement
B. Statement of cash flows
C. Balance sheet
D. Statement of retained earnings
The balance sheet shows assets, liabilities, and equity at a specific
date.
2. In governmental accounting, which fund is used to account for
general operating activities?
A. Enterprise fund
B. General fund
C. Capital projects fund
D. Trust fund
The general fund accounts for the primary operating activities of a
government.
3. Accrual accounting recognizes revenue when it is:
A. Cash is received
B. Earned
C. Billed
D. Deposited
Under accrual accounting, revenue is recorded when earned,
regardless of cash flow.
,4. Which accounting principle requires expenses to be matched with
related revenues?
A. Consistency principle
B. Matching principle
C. Cost principle
D. Conservatism principle
The matching principle aligns expenses with the revenues they
generate.
5. Depreciation is best described as:
A. A valuation of assets
B. A method to increase profits
C. Allocation of asset cost over useful life
D. Recording market value changes
Depreciation spreads an asset’s cost over its useful life.
6. Which account normally carries a credit balance?
A. Cash
B. Accounts receivable
C. Accounts payable
D. Prepaid expenses
Liabilities such as accounts payable normally have credit balances.
7. What is the primary purpose of internal controls?
A. Increase revenue
B. Reduce taxes
C. Safeguard assets and ensure accuracy
D. Eliminate errors entirely
Internal controls help protect assets and improve reliability of
records.
, 8. Which budget type compares actual results to planned amounts?
A. Capital budget
B. Operating budget
C. Cash budget
D. Flexible budget
Operating budgets are commonly used to compare planned versus
actual operations.
9. The term “fiduciary fund” refers to funds that:
A. Support daily operations
B. Finance capital assets
C. Hold resources for others
D. Are self-supporting
Fiduciary funds account for resources held in trust for others.
10. Which inventory valuation method assumes the earliest
goods purchased are sold first?
A. FIFO
B. LIFO
C. Weighted average
D. Specific identification
FIFO assumes the first items acquired are the first sold.
11. What does GAAP stand for?
A. General Accounting and Auditing Principles
B. Generally Accepted Accounting Principles
C. Governmental Accounting Application Procedures
D. Global Accounting and Analysis Practices
GAAP provides standardized accounting rules and guidelines.
Answers (Verified Answers) Plus Rationales
2026 Q&A | Instant Download Pdf
1. Which financial statement reports a company’s financial position
at a specific point in time?
A. Income statement
B. Statement of cash flows
C. Balance sheet
D. Statement of retained earnings
The balance sheet shows assets, liabilities, and equity at a specific
date.
2. In governmental accounting, which fund is used to account for
general operating activities?
A. Enterprise fund
B. General fund
C. Capital projects fund
D. Trust fund
The general fund accounts for the primary operating activities of a
government.
3. Accrual accounting recognizes revenue when it is:
A. Cash is received
B. Earned
C. Billed
D. Deposited
Under accrual accounting, revenue is recorded when earned,
regardless of cash flow.
,4. Which accounting principle requires expenses to be matched with
related revenues?
A. Consistency principle
B. Matching principle
C. Cost principle
D. Conservatism principle
The matching principle aligns expenses with the revenues they
generate.
5. Depreciation is best described as:
A. A valuation of assets
B. A method to increase profits
C. Allocation of asset cost over useful life
D. Recording market value changes
Depreciation spreads an asset’s cost over its useful life.
6. Which account normally carries a credit balance?
A. Cash
B. Accounts receivable
C. Accounts payable
D. Prepaid expenses
Liabilities such as accounts payable normally have credit balances.
7. What is the primary purpose of internal controls?
A. Increase revenue
B. Reduce taxes
C. Safeguard assets and ensure accuracy
D. Eliminate errors entirely
Internal controls help protect assets and improve reliability of
records.
, 8. Which budget type compares actual results to planned amounts?
A. Capital budget
B. Operating budget
C. Cash budget
D. Flexible budget
Operating budgets are commonly used to compare planned versus
actual operations.
9. The term “fiduciary fund” refers to funds that:
A. Support daily operations
B. Finance capital assets
C. Hold resources for others
D. Are self-supporting
Fiduciary funds account for resources held in trust for others.
10. Which inventory valuation method assumes the earliest
goods purchased are sold first?
A. FIFO
B. LIFO
C. Weighted average
D. Specific identification
FIFO assumes the first items acquired are the first sold.
11. What does GAAP stand for?
A. General Accounting and Auditing Principles
B. Generally Accepted Accounting Principles
C. Governmental Accounting Application Procedures
D. Global Accounting and Analysis Practices
GAAP provides standardized accounting rules and guidelines.
