ACCOUNTING 101 ACTUAL 2026 TEST PAPER
QUESTIONS AND SOLUTIONS RATED A+
✔✔ending balance - ✔✔the starting balance is equal to the ending balance
✔✔when is revenue recognized with respect to accrual accounting - ✔✔when earned
✔✔when is revenue recognized with respect to cash basis accounting - ✔✔when cash
is received
✔✔when are the adjusting entries required - ✔✔end of the period
✔✔supplies - ✔✔debit- supplies expense
credit- supplies revenue
to record supplies for the month
✔✔unearned revenues/ advance payments - ✔✔debit- advance payments
receivables- unearned service revenue
credit- advance payment revenues (service revenue)
to record unearned revenues but not yet received
✔✔depreciation - ✔✔debit- depreciation expense
credit- accumulated depreciation
to record depreciation for the month
✔✔accrued salaries and wages - ✔✔debit- wage and salary expense
credit- wages and salary payable
to record wages and salaries owed
✔✔closing entries: revenue and expense accounts are closed to retained earnings at
the end of the year - ✔✔they balance back to zero at the end of the year
✔✔separation of duties - ✔✔is the concept of having more than one person required to
complete a task such as:
in a business the separation by sharing of more than one individual
, ✔✔deposits in transit - ✔✔add to bank statement
✔✔outstanding checks - ✔✔subtract from bank statement
✔✔service charges - ✔✔subtract from books
✔✔interest earned - ✔✔add to books
✔✔errors - ✔✔add to bank statement
✔✔controls over cash, especially for cash sales - ✔✔- segregation of duties
- proper authorization
-adequate documents and records
-physical controls
✔✔what accounting function can be preformed only by a CPA - ✔✔auditing functions
✔✔petty cash - ✔✔an accessible store of money kept by an organization for
expenditure on small items
petty cash journal is a debit to the petty cash account and credit to cash account
✔✔credit terms 2/10, n/30 - ✔✔2/10: 2 percent cash discount pay within 10 days
n/10: entire balance us due within 30 days
✔✔FOB shipping point - ✔✔require the buyer to pay for the shipping costs
✔✔FOB destination point - ✔✔require the seller to pay for the costs of shipping for
merchandise to the buyer
✔✔2 methods for accounting for bad debts - ✔✔direct write off method
allowance method
✔✔Net realizable value of accounts receivable - ✔✔equals accounts receivable -
allowance for uncollectible accounts (bad debits)
✔✔interest for notes receivable - ✔✔principal annual interest rate * period = interest
✔✔gross profit - ✔✔equals sales - cost of goods sold
✔✔periodic method - ✔✔periodic inventory system is following journal entry is recorded
at the end of accounting period.
QUESTIONS AND SOLUTIONS RATED A+
✔✔ending balance - ✔✔the starting balance is equal to the ending balance
✔✔when is revenue recognized with respect to accrual accounting - ✔✔when earned
✔✔when is revenue recognized with respect to cash basis accounting - ✔✔when cash
is received
✔✔when are the adjusting entries required - ✔✔end of the period
✔✔supplies - ✔✔debit- supplies expense
credit- supplies revenue
to record supplies for the month
✔✔unearned revenues/ advance payments - ✔✔debit- advance payments
receivables- unearned service revenue
credit- advance payment revenues (service revenue)
to record unearned revenues but not yet received
✔✔depreciation - ✔✔debit- depreciation expense
credit- accumulated depreciation
to record depreciation for the month
✔✔accrued salaries and wages - ✔✔debit- wage and salary expense
credit- wages and salary payable
to record wages and salaries owed
✔✔closing entries: revenue and expense accounts are closed to retained earnings at
the end of the year - ✔✔they balance back to zero at the end of the year
✔✔separation of duties - ✔✔is the concept of having more than one person required to
complete a task such as:
in a business the separation by sharing of more than one individual
, ✔✔deposits in transit - ✔✔add to bank statement
✔✔outstanding checks - ✔✔subtract from bank statement
✔✔service charges - ✔✔subtract from books
✔✔interest earned - ✔✔add to books
✔✔errors - ✔✔add to bank statement
✔✔controls over cash, especially for cash sales - ✔✔- segregation of duties
- proper authorization
-adequate documents and records
-physical controls
✔✔what accounting function can be preformed only by a CPA - ✔✔auditing functions
✔✔petty cash - ✔✔an accessible store of money kept by an organization for
expenditure on small items
petty cash journal is a debit to the petty cash account and credit to cash account
✔✔credit terms 2/10, n/30 - ✔✔2/10: 2 percent cash discount pay within 10 days
n/10: entire balance us due within 30 days
✔✔FOB shipping point - ✔✔require the buyer to pay for the shipping costs
✔✔FOB destination point - ✔✔require the seller to pay for the costs of shipping for
merchandise to the buyer
✔✔2 methods for accounting for bad debts - ✔✔direct write off method
allowance method
✔✔Net realizable value of accounts receivable - ✔✔equals accounts receivable -
allowance for uncollectible accounts (bad debits)
✔✔interest for notes receivable - ✔✔principal annual interest rate * period = interest
✔✔gross profit - ✔✔equals sales - cost of goods sold
✔✔periodic method - ✔✔periodic inventory system is following journal entry is recorded
at the end of accounting period.
