HBS CORe Exam Questions With Correct
Answers
What |Accounting |Principle |Does |the |Following |Represent:
Real |Estate |prices |in |Orderville |have |increased |dramatically |over |the |last |five |years. |Although |
the |land |under |Chad's |office |building |is |currently |believed |to |be |worth |$500,000, |it |is |recorded
|at |$250,000 |because |that |is |the |price |he |paid |for |it. |- |CORRECT |ANSWER✔✔-Historical |Cost |
Principle
What |is |the |Accounting |Equation? |- |CORRECT |ANSWER✔✔-Assets |= |Liabilities |+ |Equity
What |Accounting |Principle |Does |the |Following |Represent:
AQG |Industries |purchases |$20,000 |of |product |on |credit |from |RSI |Manufacturing. |AQG |records |
the |purchase |as |an |increase |in |inventory |and |an |increase |in |accounts |payable. |AQG |feels |that |
they |will |be |able |to |realize |the |value |from |the |inventory |and |settle |the |obligation |to |RSI |in |the
|weeks |to |come. |- |CORRECT |ANSWER✔✔-"Going |Concern" |Concept
A |"note |payable |for |a |bank |loan" |is |an |example |of |a... |- |CORRECT |ANSWER✔✔-Liability
The |principle |of |Conservatism, |says |that |a |company |should |choose |measurement |methods |
that |anticipate |and |record |_____________ |but |don't |anticipate |and |record |_____________. |- |
CORRECT |ANSWER✔✔-future |losses; |future |gains
What |Accounting |Principle |Does |the |Following |Represent:
,A |microfinance |institution |has |been |relying |on |government |collateral |subsidies |to |finance |
start-ups |in |rural |areas. |However, |the |government |has |cut |the |program |recently. |The |company |
reports |this |situation |in |its |financial |statements |as |this |might |affect |the |decisions |of |
stakeholders. |- |CORRECT |ANSWER✔✔-Materiality
Cost |of |Goods |Sold, |Rent |Expense, |and |Wages |Expense |are |examples |of |what |type |of |account?
|- |CORRECT |ANSWER✔✔-Expense |Account
Sales |Revenue |& |Deferred |Revenue |decrease |with: |Debit |or |Credit? |- |CORRECT |ANSWER✔✔-
Debit
Cost |of |Goods |Sold, |Accounts |Receivable, |Cash: |Increase |or |Decrease |with |a |Credit |- |CORRECT |
ANSWER✔✔-Decrease
These |accounts |increase |with |a |debit |or |credit: |
Cash, |Depreciation |Expense, |Prepaid |Rent |- |CORRECT |ANSWER✔✔-Debit
The |accounts |increase |with |a |debit |or |credit: |
Sales |Revenue, |Deferred |Revenue |- |CORRECT |ANSWER✔✔-Credit
True |or |False: |Transactions |are |only |recorded |when |there |is |an |exchange |of |cash |- |CORRECT |
ANSWER✔✔-False: |This |is |true |for |Cash |Basis |Accounting, |but |not |for |Accrual |Accounting.
The |income |statement |reflects |a |company's: |- |CORRECT |ANSWER✔✔-Financial |performance |
over |a |given |period |of |time
What |represents |the |net |income/(loss) |for |the |year? |- |CORRECT |ANSWER✔✔-The |difference |
between |the |revenues/gains |and |expenses/losses.
, Income |Statement: |
Examples |of |Permanent |Accounts |- |CORRECT |ANSWER✔✔--CASH |AND |CASH |EQUIVALENTS
-RENT |PAYABLE
-INVENTORY
Income |Statement: |
Examples |of |Temporary |Accounts |- |CORRECT |ANSWER✔✔--COST |OF |GOODS |SOLD
-SALES |REVENUE
-RENT |EXPENSE
Nominal |Accounts |- |CORRECT |ANSWER✔✔-Accounts |that |are |reset |to |zero |at |the |end |of |each |
accounting |period. |Nominal |accounts |include |all |revenue |and |expense |accounts, |and |may |also |
be |referred |to |as |temporary |accounts |or |Income |Statement |accounts. |The |net |balance |of |
nominal |accounts |is |transferred |to |retained |earnings |at |the |end |of |each |accounting |period.
Real |Accounts |- |CORRECT |ANSWER✔✔-Accounts |which |contain |cumulative |balances |since |the |
inception |of |the |business. |The |balances |in |these |accounts |flow |from |one |accounting |period |to |
the |next. |Real |accounts |include |all |asset, |liability, |and |owners' |equity |accounts |and |may |also |
be |referred |to |as |permanent |accounts |or |Balance |Sheet |accounts.
Balance |Sheet |- |CORRECT |ANSWER✔✔-Financial |report |that |shows |the |financial |position |of |a |
company |at |a |specific |point |in |time; |a |snapshot |of |the |resources |that |are |owned |or |controlled |
by |company, |and |how |those |resources |were |financed. |The |balance |sheet |shows |the |balance |of
|all |asset, |liability, |and |equity |accounts |as |of |a |given |date.
What |type |of |account |is |'mortgage |payable'? |- |CORRECT |ANSWER✔✔-long |term |liability |
account
Answers
What |Accounting |Principle |Does |the |Following |Represent:
Real |Estate |prices |in |Orderville |have |increased |dramatically |over |the |last |five |years. |Although |
the |land |under |Chad's |office |building |is |currently |believed |to |be |worth |$500,000, |it |is |recorded
|at |$250,000 |because |that |is |the |price |he |paid |for |it. |- |CORRECT |ANSWER✔✔-Historical |Cost |
Principle
What |is |the |Accounting |Equation? |- |CORRECT |ANSWER✔✔-Assets |= |Liabilities |+ |Equity
What |Accounting |Principle |Does |the |Following |Represent:
AQG |Industries |purchases |$20,000 |of |product |on |credit |from |RSI |Manufacturing. |AQG |records |
the |purchase |as |an |increase |in |inventory |and |an |increase |in |accounts |payable. |AQG |feels |that |
they |will |be |able |to |realize |the |value |from |the |inventory |and |settle |the |obligation |to |RSI |in |the
|weeks |to |come. |- |CORRECT |ANSWER✔✔-"Going |Concern" |Concept
A |"note |payable |for |a |bank |loan" |is |an |example |of |a... |- |CORRECT |ANSWER✔✔-Liability
The |principle |of |Conservatism, |says |that |a |company |should |choose |measurement |methods |
that |anticipate |and |record |_____________ |but |don't |anticipate |and |record |_____________. |- |
CORRECT |ANSWER✔✔-future |losses; |future |gains
What |Accounting |Principle |Does |the |Following |Represent:
,A |microfinance |institution |has |been |relying |on |government |collateral |subsidies |to |finance |
start-ups |in |rural |areas. |However, |the |government |has |cut |the |program |recently. |The |company |
reports |this |situation |in |its |financial |statements |as |this |might |affect |the |decisions |of |
stakeholders. |- |CORRECT |ANSWER✔✔-Materiality
Cost |of |Goods |Sold, |Rent |Expense, |and |Wages |Expense |are |examples |of |what |type |of |account?
|- |CORRECT |ANSWER✔✔-Expense |Account
Sales |Revenue |& |Deferred |Revenue |decrease |with: |Debit |or |Credit? |- |CORRECT |ANSWER✔✔-
Debit
Cost |of |Goods |Sold, |Accounts |Receivable, |Cash: |Increase |or |Decrease |with |a |Credit |- |CORRECT |
ANSWER✔✔-Decrease
These |accounts |increase |with |a |debit |or |credit: |
Cash, |Depreciation |Expense, |Prepaid |Rent |- |CORRECT |ANSWER✔✔-Debit
The |accounts |increase |with |a |debit |or |credit: |
Sales |Revenue, |Deferred |Revenue |- |CORRECT |ANSWER✔✔-Credit
True |or |False: |Transactions |are |only |recorded |when |there |is |an |exchange |of |cash |- |CORRECT |
ANSWER✔✔-False: |This |is |true |for |Cash |Basis |Accounting, |but |not |for |Accrual |Accounting.
The |income |statement |reflects |a |company's: |- |CORRECT |ANSWER✔✔-Financial |performance |
over |a |given |period |of |time
What |represents |the |net |income/(loss) |for |the |year? |- |CORRECT |ANSWER✔✔-The |difference |
between |the |revenues/gains |and |expenses/losses.
, Income |Statement: |
Examples |of |Permanent |Accounts |- |CORRECT |ANSWER✔✔--CASH |AND |CASH |EQUIVALENTS
-RENT |PAYABLE
-INVENTORY
Income |Statement: |
Examples |of |Temporary |Accounts |- |CORRECT |ANSWER✔✔--COST |OF |GOODS |SOLD
-SALES |REVENUE
-RENT |EXPENSE
Nominal |Accounts |- |CORRECT |ANSWER✔✔-Accounts |that |are |reset |to |zero |at |the |end |of |each |
accounting |period. |Nominal |accounts |include |all |revenue |and |expense |accounts, |and |may |also |
be |referred |to |as |temporary |accounts |or |Income |Statement |accounts. |The |net |balance |of |
nominal |accounts |is |transferred |to |retained |earnings |at |the |end |of |each |accounting |period.
Real |Accounts |- |CORRECT |ANSWER✔✔-Accounts |which |contain |cumulative |balances |since |the |
inception |of |the |business. |The |balances |in |these |accounts |flow |from |one |accounting |period |to |
the |next. |Real |accounts |include |all |asset, |liability, |and |owners' |equity |accounts |and |may |also |
be |referred |to |as |permanent |accounts |or |Balance |Sheet |accounts.
Balance |Sheet |- |CORRECT |ANSWER✔✔-Financial |report |that |shows |the |financial |position |of |a |
company |at |a |specific |point |in |time; |a |snapshot |of |the |resources |that |are |owned |or |controlled |
by |company, |and |how |those |resources |were |financed. |The |balance |sheet |shows |the |balance |of
|all |asset, |liability, |and |equity |accounts |as |of |a |given |date.
What |type |of |account |is |'mortgage |payable'? |- |CORRECT |ANSWER✔✔-long |term |liability |
account
