Online Access Free Accounting-for-Decision-Makers Practice Test

Which current asset on a balance sheet appears first in the traditional category order for U.S.-based companies?

• A.Prepaid expenses
• B.Cash
• C.Inventory
• D.Accounts receivable

Which internal control is intended to ensure that a company does not mistakenly pay a supplier for an invoice that includes more items than were actually received?

• A.The accounts payable department uses prenumbered checks in the payment of supplier invoices
• B.The inventory department counts and inspects items as received and forwards the receiving record to accounts payable
• C.The purchasing department authorizes the order of all items before they occur
• D.The company requires two signatures on each check in order for a payment to be sent

The following cost-volume-profit graph shows revenues and costs at various levels of production.
How many units should this company sell each month to realize a profit?

• A.225
• B.275
• C.100
• D.250

Which balance sheet category reflects what a company owns that can be turned into cash or used to generate cash?

• A.Owners' equity
• B.Revenues
• C.Liabilities
• D.Assets

Which item is an operating activity under a U.S. generally accepted accounting principles (GAAP) statement of cash flows?

• A.Cash receipts from the sale of a business segment
• B.Cash receipts for the sale of plant assets
• C.Cash payments for purchase of plant assets
• D.Cash payments for administration expenses