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1. ACC 290 Week 3 Chapter 4,5 Orion WileyPlus
Proficiency and Practice Quiz
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ACC 290 Week 3 Chapter 4,5 Orion WileyPlus Proficiency and
Practice Quiz

2. ACC 290 Chapter 4 Orion WileyPlus Build your Proficiency
Q 4.1: Which of the following statements about accrual-basis
accounting is NOT true?
Q 4.2: If a company spends $12 million dollars for a warehouse,
when should the cost be written off?
Q 4.3: If an expense has been used or consumed but a bill has not
been received at the end of the accounting period, which of the
following is needed?
Q 4.4: Which of the following is true about unearned revenues?
Q 4.5: Which of the following exemplify an asset-expense
relationship?
Q 4.6: If an adjustment is needed for unearned revenues, the liability
is
Q 4.7: Which of the following explains the process of depreciation?
Q 4.8: The of an asset is the difference between the cost of a
depreciable asset and its related accumulated depreciation.
Q 4.9: From an accounting standpoint, the acquisition of a long-
lived asset such as a building can be thought of as a long-term
Q 4.10: What does the time period assumption state?
Q 4.11: Which of the following are common time periods that
businesses use as their accounting period? Select all that apply.
Q 4.12: A is an accounting period that is one year long
Q 4.13: basis accounting is in accordance with generally accepted
accounting principles.
Q 4.14: According to the revenue recognition principle, when should
revenue be recognized in the accounting period?
Q 4.15: Companies must make adjusting entries
Q 4.16: Suppose that a company did not make an adjusting entry to
record revenue earned but not yet billed to customers. The result of
this error would be to
Q 4.17: If an adjusting entry for depreciation is NOT made, will be
understated.
Q 4.18: The adjusted trial balance is the primary basis of the
financial statements.

3. Q 4.19: All balance sheet accounts are considered accounts because
their balances are carried over into future accounting periods.
Q 4.20: Closing entries and a post-closing trial balance are steps in
the accounting cycle that occur
ACC 290 Chapter 4 Orion
ACC 290 Ch 4 practice quiz
Practice Question 01 The revenue recognition principle dictates that
revenue is recognized in the period in which the cash is received.
Practice Question 05 The generally accepted accounting principle
which dictates that revenue be recognized in the accounting period in
which the performance obligation is satisfied is the
Practice Question 10 Which statement is correct?
Practice Question 16 Book value is equal to cost minus accumulated
depreciation
Practice Question 21 Adjustments for unearned revenues:
Practice Question 26 At December 31, 2013, before any year-end
adjustments, Macarty Company's Prepaid Insurance account had a
balance of $2,700. It was determined that $1,500 of the Prepaid
Insurance had expired. The adjusting entry for Insurance Expense for
the year would be
Practice Question 31 Which of the following is not a typical example
of an accrued expense?
Practice Question 36 Saira works for a sports franchise which pays
wages and salaries earned on a monthly basis. A new accountant was
hired by the sports franchise in late May. Due to inexperience, the
new accountant failed to accrue Saira’s salary for May. What is the
impact on the May 31 financial statements of the sports franchise ?
Practice Question 42 At the end of the accounting period, all balance
sheet accounts are closed out.
Practice Question 53 Which is the correct order of steps in the
accounting cycle?

4. ACC 290 Chapter 5 Orion WileyPlus Build your Proficiency
Q 5.1: All of the following would be considered merchandising
companies EXCEPT
Q 5.2: A department store uses a perpetual inventory system. At
year-end, the balance in the merchandise inventory account is $2
million. Assuming that the inventory records have been maintained
properly, a year-end physical inventory
Q 5.3: In a inventory system, the cost of goods is determined only at
the end of the accounting period
Q 5.4: A company receives a discount for paying for merchandise
purchased within the discount period. How will the amount of the
discount be recorded in a perpetual inventory system?
Q 5.5: What does the freight term “FOB destination” mean?
Q 5.6: A retailer acquires merchandise for resale. How would this be
recorded in a perpetual inventory system?
Q 5.7: If the credit terms on a sales invoice read “2/10, n/30,” what
does this mean?
Q 5.8: In which of the following scenarios would a Sales and Returns
and Allowances account NOT be debited?
Q 5.9: ________ has a normal credit balance.
Q 5.10: Which of the following is NOT a contra revenue account?
Q 5.11: In a perpetual inventory system, when is the Cost of Goods
Sold account used?
Q 5.12: ________ is shown on a multiple-step but not on a single-
step income statement.
Q 5.13: Why might a company choose to use the single-step income
statement? Select all that apply.
Q 5.14: At the beginning of January 2014, a company reported
inventory of $4,000. During the month, the company made purchases
of $17,800. On January 31, 2014, a physical count of inventory
reported $4,200 on hand. Find the cost of goods sold for the month.
Q 5.15: ________ requires a physical count of goods on hand to
compute the cost of goods sold.

5. Q 5.16: During the year, a company’s inventory decreased by
$20,000. If the company’s cost of goods sold for the year was
$400,000, find the amount for purchases.
Q 5.17: How is the gross profit rate computed
Q 5.18: How is the profit margin computed?
Q 5.19: How is the quality of earnings ratio computed?
Q 5.20: How do you calculate the cost of goods for sale if closing
inventory is nil?
ACC 290 Chapter 5 Orion WileyPlus Build your Proficiency
• Question 1 The operating cycle of a merchandising company is
ordinarily shorter than that of a service company.
• Question 2 The operating cycle of a merchandising company is
ordinarily ___________________ that of a service firm.
• Question 3 Jax Company uses a perpetual inventory system and on
November 30 purchased merchandise for which it must pay the
shipping charges. Which of the following is one part of the required
journal entry when Jax pays the shipping charges of $200?
• Question 4 Sales Discounts is a contra asset account.
• Question 5 Which statement is true when recording the sale of
goods for cash in a perpetual inventory system?
• Question 6 Net income is $15,000, operating expenses are $20,000,
and net sales total $75,000. How much is cost of goods sold?
• Question 7 Which one of the following will result in gross profit?
• Question 8 Under what system is cost of goods sold determined at
the end of an accounting period?
• Question 9 Net income is $15,000, operating expenses are $20,000,
net sales total $75,000, and sales revenues total $95,000. How much
is the profit margin?
• Question 10 In a periodic inventory system, when is the cost of the
merchandise sold determined?

6. Q 5.16: During the year, a company’s inventory decreased by
$20,000. If the company’s cost of goods sold for the year was
$400,000, find the amount for purchases.
Q 5.17: How is the gross profit rate computed
Q 5.18: How is the profit margin computed?
Q 5.19: How is the quality of earnings ratio computed?
Q 5.20: How do you calculate the cost of goods for sale if closing
inventory is nil?
ACC 290 Chapter 5 Orion WileyPlus Build your Proficiency
• Question 1 The operating cycle of a merchandising company is
ordinarily shorter than that of a service company.
• Question 2 The operating cycle of a merchandising company is
ordinarily ___________________ that of a service firm.
• Question 3 Jax Company uses a perpetual inventory system and on
November 30 purchased merchandise for which it must pay the
shipping charges. Which of the following is one part of the required
journal entry when Jax pays the shipping charges of $200?
• Question 4 Sales Discounts is a contra asset account.
• Question 5 Which statement is true when recording the sale of
goods for cash in a perpetual inventory system?
• Question 6 Net income is $15,000, operating expenses are $20,000,
and net sales total $75,000. How much is cost of goods sold?
• Question 7 Which one of the following will result in gross profit?
• Question 8 Under what system is cost of goods sold determined at
the end of an accounting period?
• Question 9 Net income is $15,000, operating expenses are $20,000,
net sales total $75,000, and sales revenues total $95,000. How much
is the profit margin?
• Question 10 In a periodic inventory system, when is the cost of the
merchandise sold determined?