BPA Advanced Accounting Practice Test

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• What term describes the value of an asset determined by tax authorities for tax calculation purposes?
• Which ratio indicates how many times a company can cover its interest expense with earnings?
• Who is referred to as the owner of one or more shares of stock?
• How is all property not classified as real property described?
• What is the book value of a plant asset?
• What term is used for a ledger that is summarized in a single general ledger account?
• What is the name of the tax rate used to calculate property taxes?
• What do we call the initial issue of a security offered on a public exchange?
• What is a computer used to collect, store, and report all the information of a sales transaction called?
• Which accounting method involves recording both the debit and credit parts of a transaction?
• Which listing includes vendor accounts and the total amount due to all vendors?
• Which inventory estimation method uses a percentage based on both cost and retail prices?
• Gross profit can be described as:
• What is a financial statement that summarizes cash receipts and payments resulting from business activities during a specific period called?
• What does free cash flow measure?
• What are expenses incurred in one fiscal period but not yet paid until a later fiscal period called?
• Which corporation type has shareholders that experience personal liability for corporate debts?
• What is the primary purpose of comparative financial statements?
• What cash transactions are related to debt or equity transactions?
• What does the process of paying the amounts owed to bondholders for a bond issue refer to?
• What is the main function of a debit memorandum in accounting?
• What is the effect of depreciation on the financial statements of a company?
• What type of ledger is used primarily to control detailed transactions?
• What do accrued expenses represent in accounting?
• What is one of the main advantages of using the modified accelerated cost recovery system?
• Which method involves listing cash flows from operating activities as cash receipts and cash payments?
• What type of note deducts interest from the face value of the note?
• What maintains a record that links debits and credits across multiple transactions?
• What type of entry is made to adjust or move balances between accounts in the same financial statement?
• Which of the following refers to the total interest expense incurred during a period?
• What is the term for an accounting system that shows information for multiple departments?
• Which inventory costing method calculates the cost of goods sold using the last purchases?
• What is the interest rate charged to a bank's most creditworthy customers known as?
• Which type of organization has the legal rights of a person and can be owned by multiple individuals or corporations?
• Which type of note has a stated interest rate?
• What document serves as initial evidence of a business transaction?
• What is the term for a deduction that a vendor allows on the invoice amount to encourage prompt payment?
• Who is referred to as the person or business that receives goods on consignment?
• What is a trial balance prepared before adjusting entries are posted called?
• What value is associated with unredeemed gift cards?
• What are temporary accounts that are reset for a new fiscal period called?
• In accounting, how is the liquidity of a business measured?
• In responsibility accounting, which of the following is used to evaluate a specific manager’s performance?
• What is the term for the rate of interest used to calculate periodic payments on a bond?
• Which document is primarily used to record the financial position of a company at a specific point in time?
• What typically signifies that a company's accounts receivable turnover ratio is declining?
• Which depreciation method is best suited for an asset whose wear and tear relates closely to its usage?
• How is stated-value stock characterized in terms of its assignment of value?
• Which accounting principle emphasizes the consistency of reporting over time?
• What document is prepared by the vendor showing the amount deducted for returns and allowances?
• What is the effect of prepayments on financial statements?
• Which document serves as a snapshot of the financial position regarding customer accounts?
• What is the term for the amount that is due on the maturity date of a note?
• Which type of business purchases and sells goods?
• What is one primary advantage of limited liability for corporate owners?
• Which option is NOT a factor in calculating Earnings per share?
• What is the primary purpose of the statement of cash flows?
• What type of activities would include the purchase of machinery for production?
• Which type of record summarizes all the transactions related to a single item in the accounting equation?
• Which financial statement item does unearned revenue impact?
• What proof is used to confirm the equality of debits and credits in a general ledger?
• What term is used for financial statements that report revenue, costs, and direct expenses under a specific department's control?
• Which term describes the standards and rules that accountants follow while recording and reporting financial activities?
• What form is used to record the type of merchandise, quantity received, quantity sold, and balance on hand?
• What does a financial ratio represent?
• What do you call promissory notes that are signed by a business and issued to a creditor?
• What does it mean to write off an account?
• What is the primary purpose of a line of credit?
• Which account reduces a related account on a financial statement?
• Which accounting form summarizes the earnings, deductions, and net pay of all employees for one pay period?
• What term refers to a financial summary that outlines how long financial results are reported?
• Which financial ratio reflects the effectiveness of managing shareholder equity?
• What refers to the process of depositing payroll checks directly into a bank account?
• What does the operating margin represent?
• Which financial metric assesses a company's ability to generate cash after capital expenditures?
• What is the primary purpose of adjusting entries?
• Which financial activity pertains to transactions that affect a company’s ownership or debt structure?
• What do you call the date on which the principal of a note must be repaid?
• What method estimates inventory by using the previous year's percentage of gross profit on operations?
• What type of activities include cash receipts and payments necessary to operate a business on a day-to-day basis?
• Which method shows cash flows from operating activities based on actual cash transactions?
• What type of expense is characterized as being chargeable to overall business operations and not tied to a specific department?
• What document is submitted to the SEC to obtain permission for selling a security on a public exchange?
• What does the rate earned on average total assets evaluate?
• Which class of stock provides preferred shareholders with preference over common shareholders in terms of dividends?
• What does a registration statement include when submitted to the SEC?
• What does a "schedule of accounts payable" primarily detail?
• What is comprehensive income primarily concerned with?
• What document serves as written evidence of the number of shares owned by each stockholder in a corporation?
• What is the term for the amount earned by a corporation and not yet distributed to stockholders?
• What do you call the earnings that are distributed to stockholders of a corporation?
• What process allows for the automatic transferring of payroll to employees' accounts without physical checks?
• What does the term "bond issue" refer to?
• What is a computerized cash payments system that transfers funds without the use of checks, currency, or other paper documents?
• What is a cash discount on sales taken by a customer commonly called?
• What are journal entries used to prepare temporary accounts for a new fiscal period called?
• What is the role of the person who gives goods on consignment?
• What is the relationship between dividends per share and market price per share called?
• What inventory costing method uses the price of merchandise purchased first to determine the cost of goods sold?
• What is the process called that describes the decrease in the value of a plant asset due to the removal of a natural resource?
• What accounting process involves analyzing accounts receivable according to when they are due?
• What is the term used for a corporation that is formed to provide goods or services at minimal or no profit?
• What system prescribes periods for nine classes of plant assets for depreciation?
• What is the term for the difference between an asset's account balance and its related contra account balance?
• What are liabilities that are due within a short period, typically within one year, known as?
• What term describes cash received for goods or services that have not yet been provided?
• What are capital expenditures?
• What is the term for net income after federal income tax divided by the number of outstanding shares of stock?
• What is the main difference between par-value stock and no-par-value stock?
• What is a financial indicator of a company's efficiency in generating profits from its assets?
• What does the term 'salvage value' specifically refer to in accounting?
• Which type of depreciation method multiplies the book value of an asset by a constant rate to determine annual depreciation?
• What term refers to the amount of total current assets less total current liabilities?
• What does the market value of a share of stock represent?
• Which equation represents the fundamental accounting principle?
• Which analysis technique focuses on comparing the current year's financial data with previous years?
• What is the term for a form used to record transactions in chronological order?
• What is referred to as the total shares of ownership in a corporation?
• What is the primary distinguishing feature of preferred stock compared to common stock?
• What is the main purpose of a controlling account?
• What defines a fiscal period consisting of 12 consecutive months?
• What is the name of the group of persons elected by the stockholders to govern a corporation?
• What type of expense is recognized before payment is made?
• What term refers to an amount paid for the use of money over a period of time?
• What is the term for goods that are given to a business to sell while the ownership remains with the vendor?
• The price earnings ratio helps investors understand what aspect of a stock?
• What does file maintenance involve in an accounting context?
• Which document provides detailed information regarding the remaining stock of items?
• What does the interest coverage ratio indicate?
• Which of the following defines the revenue earned by a department after deducting its cost of merchandise sold and direct expenses?
• What are journal entries recorded to update general ledger accounts at the end of a fiscal period called?
• Which form is used during a physical inventory to note information about merchandise on hand?
• What does the debt ratio represent?
• What is a trial balance that is prepared after closing entries are made known as?
• What method involves crediting the estimated value of uncollectible accounts to a contra account?
• What term refers to the financial rights to the assets of a business?
• Which of the following best defines the term 'dividend yield'?
• What type of financial statements provide information for multiple fiscal periods?
• What term describes the income that a company has earned but has not yet received in cash?
• Which document would typically accompany a returned item to indicate a reduction in accounts receivable?
• What term is used to describe revenue earned in one fiscal period but not received until a later fiscal period?
• Which of the following is NOT a type of payment often made through a point-of-sale terminal?
• What entry type transfers account balances between accounts on one financial statement?
• Which ratio indicates the relationship between the market value per share and the earnings per share of a stock?
• What is the fixed amount of money paid to an employee for each pay period called?
• What is the principal financial liability related to bonds?
• What is a unit of ownership in a corporation called?
• Which term represents an amount of cash kept on hand for making small payments?
• Which term is used to describe the sum of cash, cash equivalents, and marketable securities?
• Which type of bonds are characterized by all bonds maturing on the same date?
• What is a common characteristic of publicly held corporations?
• What does the common equity per share refer to?
• Which ratio measures the relationship of quick assets to current liabilities?
• Which of the following records the details of employee deductions and earnings on a continuous basis?
• What does the Days Sales in Accounts Receivable indicate?
• What business form is used to record details of an employee's earnings and deductions?
• In the declining-balance method, what is the basis for calculating annual depreciation?
• What does the gross margin express as a percentage?
• What is referred to as land and anything attached to it?
• How is estimated annual depreciation expense calculated in the units-of-production method?
• What method calculates the cost of goods sold using the average cost of beginning inventory plus purchases?
• How is no-par-value stock characterized in terms of valuation?
• What do you call a trial balance that is prepared after adjusting entries are posted?
• What is the term for the portion of a plant asset's cost that is transferred to an expense account during its useful life?
• What is the report that summarizes the cash and credit card sales of a point-of-sale terminal?
• What does the Days' Sales in Inventory metric represent?
• In an accounting system, how are accounts typically organized?
• What is the term for accounts receivable that cannot be collected?
• In the straight-line method of depreciation, what factor is primarily considered?
• How is operating margin calculated?
• What term describes anything of value that is owned by a business?
• An operating budget typically includes:
• What is the term for cash paid for an expense in one fiscal period that is not used until a later period?
• What is the term for a corporation that is owned by a small number of individuals?
• What is a columnar accounting form used to summarize general ledger information needed for preparing financial statements called?
• Which of the following is true about the market value of a share of stock?
• What does the Statement of Stockholders' Equity show for a fiscal period?
• What is defined as a note resulting from a sale that requires monthly payments of principal and interest?
• What type of asset is primarily subject to depreciation over time?
• What type of stock is described as not giving any special preferences?
• A financial statement that displays changes in cash generated and used is known as:
• What is the term for a schedule of periodic payments on a note?
• What term describes the operating revenue that remains after the cost of merchandise sold has been deducted?
• What does the indirect method for cash flows start with when adjusting for noncash items?
• What is the term for cash receipts and payments required to maintain operational functions of a company?
• What is the name of a listing that includes customer accounts and the total amount due from all customers?
• What is a journal called that is used to record only one kind of transaction?
• Which type of corporation provides limited liability to its owners?
• Which type of investment typically offers lower risk and higher liquidity?
• Which method estimates uncollectible accounts based on the company's sales history and receivables?
• Which type of corporation has its stock traded on public exchanges?
• What does the term 'equities' refer to in accounting?
• What does the series of accounting activities included in recording financial information for a fiscal period refer to?
• What does the indirect method for reporting cash flows typically add back into net income?
• What does EBIT stand for in accounting?
• Which method records an equal amount of depreciation expense for a plant asset each year of its useful life?
• What is the procedure for arranging accounts in a general ledger called?
• Which term refers to the cash receipts and cash payments of a company?
• What term describes the amount of money that an employee takes home after deductions?
• Which form is used to record information about each plant asset in a business?
• Which financial statement includes the accounting equation?
• What type of ownership structure typically contributes to shared responsibility and decision making within a business?
• What is the term for a ledger that contains all accounts needed to prepare financial statements?
• What are the accounting standards adopted globally referred to as?
• What identifies the tax rate associated with a specific tax bracket?
• Which of the following best describes physical assets used for a number of years in the operation of a business?
• What is the primary purpose of a stock ledger?
• What financial statement component gives an overview of a business's asset management and collection efficiency?
• What is defined as an amount owed by a business?
• Which financial statement provides an overview of revenue and expenses for a fiscal period?
• Which statement best describes petty cash?
• What is the accounting method that assigns control of revenues, costs, and expenses to a specific manager called?
• What is the term used to describe the maximum amount of earnings on which a tax is calculated?
• Which term describes a business where two or more persons combine their assets and skills?
• What are cash and other current assets that can be converted quickly to cash known as?
• What term describes the total amount earned by all employees for a pay period?
• What is the term for a state-issued document that grants the legal right to conduct operations as a corporation?
• How is the Inventory Turnover Ratio calculated?
• What is the amount to be paid to a bondholder at maturity called?
• Which method records uncollectible accounts expense only when an amount is actually known to be uncollectible?
• What type of accounting method records revenues and expenses when they are incurred, regardless of cash flow?
• What denotes the proportion of net income that a company generates relative to its total assets?
• What is the term used for each tax rate and taxable income amount listed on one line of a tax table?
• What is the basis for calculating dividend yield?
• What term refers to the amount paid to an employee for every hour worked?
• What term describes the day a note is issued?
• What does it indicate if the aging of accounts receivable shows an increase in overdue accounts?
• What do you call the business papers from which information is obtained for a journal entry?
• What is the term for the length of time for which a business summarizes its financial information?
• What is calculated by dividing Net Sales by Average Accounts Receivable?
• What term describes transferring information from a journal entry to a ledger account?
• What is the term for the rate at which the price for goods and services increases over time?
• What is a written and signed promise to pay a specific sum of money at a designated time called?
• What is the term for the rate at which the price for goods and services decreases over time?
• Which of the following best defines a cash discount?
• What type of loan provides immediate short-term access to cash?
• What is a financial statement that specifically reports departmental margin for a particular department called?
• Which cash activities involve the sale or purchase of assets used to earn revenue over time?
• What are classified as short-term, highly liquid investments that can be readily converted to a specific amount of cash?
• In accounting, what concept describes an increase in prices leading to decreased purchasing power?
• What is a form prepared by a customer that shows a price deduction for returns or allowances called?
• What term refers to the value assigned to a share of stock and is printed on the stock certificate?
• What financial strategy involves obtaining capital by borrowing money for a defined period?
• What term describes a file containing stock records for all merchandise on hand?
• Which type of stock is defined as having par value?
• What is a deduction from total earnings for each person legally supported by a taxpayer called?
• Vertical analysis in financial reporting involves what method?
• What are portions of a bond issue that mature on different dates called?
• What is the term for the ratio obtained by dividing stockholders' equity by total assets?
• Which of these is primarily associated with tracking performance within specific departments of an organization?
• Which of the following typically reflects changes in market prices over time?
• What is defined as cash and other assets expected to be exchanged for cash or consumed within a year?
• Which type of ledger summarizes all accounts in a subsidiary ledger?
• What term describes an operating expense that is identifiable with and chargeable to the operation of a specific department?
• What term describes the taxation of earnings to both the corporation and the stockholders when dividends are received?
• What method recognizes a full year's depreciation if the asset is acquired in the first half of the year?
• Which of the following is NOT considered an operating activity?
• What legal document identifies the basic characteristics of a corporation?
• Which ratio measures the relationship of current assets to current liabilities?
• What term refers to the amount that will be received for an asset at the time of its disposal?
• What is a reversing entry?
• Which method is commonly used for valuing inventory that assumes the oldest inventory items are sold first?
• What does "consignee" refer to in a consignment arrangement?
• Which type of account would depreciation expense be categorized under?
• What term refers to a long-term promise to pay a specified amount on a certain date while also paying interest?
• Which inventory costing method uses the lower of cost or market price for calculating the cost of ending merchandise inventory?
• What is the percentage of the principal that is due for the use of funds secured by a note called?
• What is the result of the value of assets subtracted by the value of liabilities?
• How are liabilities characterized in relation to owner’s equity?
• Which describes the legal status and characteristics of a corporation as stipulated in its formation?
• What is the original amount of a note referred to as?
• What is the formula for the rate earned on average stockholders' equity?
• Which of the following best describes a general ledger?
• What is the characteristic of a share of stock that has no authorized value printed on the stock certificate?
• What describes a financial arrangement that typically allows payment over time through regular installments?
• What is defined as all changes in equity during a period excluding investments by and distributions to owners?
• Which method recognizes one half of a year's depreciation in the year of acquisition?
• In financial statements, what does the breakage value typically refer to?