Accounting Competency

ACCOUNTING COMPETENCY EXAM

SAMPLE EXAM

1.

The accounting process does not include:

a.

b.

c.

2.

d.

e.

labor unions

all of the above

statement of owner’s equity

income statement

balance sheet

d.

e.

both b and c

all of the above

This account does not appear on the income statement:

a.

b.

c.

6.

lenders

prospective owners

customers

Expenses can be found in the:

a.

b.

c.

5.

balance sheet

balance sheet and journals

balance sheet and income statement

income statement

none of the above

External users of financial accounting information include:

a.

b.

c.

4.

d. observing

e. classifying

The financial statement or statements that pertain to a stated period of time is (are) the:

a.

b.

c.

d.

e.

3.

interpreting

reporting

purchasing

accumulated depreciation

depreciation expense

sales revenue

d.

e.

marketing expense

interest expense

A brand new company has a building costing $10,000, machinery costing $5,000, cash of

$700, and a bank loan of $7,850. What is the owner’s equity?

a.

b.

c.

$8,850

$15,700

$7,750

d.

e.

cannot be determined

$7,850

7.

An example of an economic exchange includes:

a.

b.

c.

d.

e.

8.

If a company has owner’s equity of $100,000,

a.

b.

c.

d.

e.

9.

a business owner purchases inventory on credit

a dry cleaning business cleans 3 dresses for a customer

an insurance agent sells a whole life policy

a contractor purchases a new truck for cash

all of the above

assets minus liabilities equal $100,000

total assets must equal $100,000

net income for the past year was $100,000

a total of $100,000 was invested by the owner

none of the above

Providing services on account for $40,000 would:

a.

b.

c.

d.

e.

increase cash $40,000, decrease accounts receivable $40,000

decrease accounts receivable $40,000, decrease owner’s equity $40,000

increase accounts receivable $40,000, increase owner’s equity $40,000...