Accounting Test

Thank you in advance for answering these general accounting / bookkeeping questions.

Sincerely,

Tim Haratine

The Accrual Method (Basis) of accounting records income in the period earned and expenses in the period incurred.

True

False

The Double Entry Bookkeeping System uses debits and credits?

True

False

The Single Entry Bookkeeping System uses debits and credits?

True

False

The Cash Method of accounting provides a better indicator of a business's profits or losses.

True

False

Where will you find an asset?

Balance Sheet

Income Statement

Where will you find Revenue recorded?

Balance Sheet

Income Statement

Where will you find Draws recorded?

Balance Sheet

Income Statement

An invoice owed be a customer is record in what account?

Cash

Notes Receivable

Accounts Receivable

Accounts Payable

To credit an expense account means to decrease it?

True

False

Which of the following assets is not a Current Asset?

Inventory

Equipment

Accounts Receivable

Cash

The Financial Statement that shows the Net Worth of a business s the Income Statement?

True

False

You provide accounting services for a C-Corporation planning to switch to an S-Corporation status. When can the S-Corp. election be made?

Anytime.

During the first 3 months of the new year.

During the first 90 days of the company's business year.

During the first 90 days of the new year.

This is not possible. You must close the C-Corp company and create an S-Corp. company.

You are preparing someone's personal income tax returns and they provide you with expenses for a rental property they own. On what tax schedule should these tax expenses be recorded?

For rental property maintenance, when using independent 3rd party individuals for labor, check all of the following procedures that apply.

Expenses should be documented contemporaneously.

A signed copy of a 3rd party contractor receipt should be retained for the IRS.

Payment to the 3rd party can be made by cash.

Payment to the 3rd party must be made by check.

All 3rd party contractor conversations should be recorded.

For S-Corporations, in 2014, what is the total amount of capital purchases that can be expensed in a single year.

Please list 3 reasons to choose a C-Corp versus an S-Corp status for a company.

Please list 3 reasons to choose an S-Corp versus a C-Corp status for a company.

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