A100 Practice Test Questions with Correct
Answers
1Which of the following is not one of the Big Four accounting firms?
a Deloitte b KPMG c DebitsAndCreditsCorp.com
d PriceWaterhouseCoopers
e All of the above firms are Big Four accounting firms. - CORRECT ANSWER -c
DebitsAndCreditsCorp.com
5 Which of the following is true regarding depreciation?
a Depreciation is a deduction made to adjust an asset listed on the balance sheet
to its actual value.
b Depreciation deductions are classified as an operating cash flow on the
statement of cash flows.
c A depreciation deduction increases expenses and increases assets.
d A depreciation deduction decreases retained earnings and decreases assets.
e None of the above are true. - CORRECT ANSWER -a Depreciation is a deduction
made to adjust an asset listed on the balance sheet to its actual value.
6 Unearned revenue refers to
a an amount that may or may not have been received and has not yet been
recorded on the income statement.
b an amount that may or may not have been received and has been recorded on
the income statement.
, c an amount that has been received that has not yet been recorded on the income
statement.
d an amount that has been received that has been recorded on the income
statement.
e an amount that has been received but is not recorded on the company's balance
sheet until it is earned. - CORRECT ANSWER -c an amount that has been received
that has not yet been recorded on the income statement.
7 Which of the following is NOT true?
a At the end of each period, expenses of the company reduce the amount flowing
to stockholders' equity.
b The statement of cash flows is a summary of the transactions in the cash
account.
c The balance sheet covers the company's transactions over a period of time.
d Gross profit is a subtotal located on the income statement.
e Dividend expense is not an account on the income statement. - CORRECT
ANSWER -c The balance sheet covers the company's transactions over a period of
time.
8 Which of the following is true regarding the land account?
a If no land was purchased during the period, the decrease in this account during
the period is the amount for which land was sold.
b The change in the balance in this account during the period is the amount paid
for any land purchased minus the amount received for any land sold.
c Any gain or loss on the sale of land is recorded on the statement of cash flows.
Answers
1Which of the following is not one of the Big Four accounting firms?
a Deloitte b KPMG c DebitsAndCreditsCorp.com
d PriceWaterhouseCoopers
e All of the above firms are Big Four accounting firms. - CORRECT ANSWER -c
DebitsAndCreditsCorp.com
5 Which of the following is true regarding depreciation?
a Depreciation is a deduction made to adjust an asset listed on the balance sheet
to its actual value.
b Depreciation deductions are classified as an operating cash flow on the
statement of cash flows.
c A depreciation deduction increases expenses and increases assets.
d A depreciation deduction decreases retained earnings and decreases assets.
e None of the above are true. - CORRECT ANSWER -a Depreciation is a deduction
made to adjust an asset listed on the balance sheet to its actual value.
6 Unearned revenue refers to
a an amount that may or may not have been received and has not yet been
recorded on the income statement.
b an amount that may or may not have been received and has been recorded on
the income statement.
, c an amount that has been received that has not yet been recorded on the income
statement.
d an amount that has been received that has been recorded on the income
statement.
e an amount that has been received but is not recorded on the company's balance
sheet until it is earned. - CORRECT ANSWER -c an amount that has been received
that has not yet been recorded on the income statement.
7 Which of the following is NOT true?
a At the end of each period, expenses of the company reduce the amount flowing
to stockholders' equity.
b The statement of cash flows is a summary of the transactions in the cash
account.
c The balance sheet covers the company's transactions over a period of time.
d Gross profit is a subtotal located on the income statement.
e Dividend expense is not an account on the income statement. - CORRECT
ANSWER -c The balance sheet covers the company's transactions over a period of
time.
8 Which of the following is true regarding the land account?
a If no land was purchased during the period, the decrease in this account during
the period is the amount for which land was sold.
b The change in the balance in this account during the period is the amount paid
for any land purchased minus the amount received for any land sold.
c Any gain or loss on the sale of land is recorded on the statement of cash flows.
