UNLV Accounting Competency Practice Exam

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• What is the purpose of closing entries in accounting?
• Which financial statement shows the profitability of a company over a specific period?
• What is the function of the revenue recognition principle in accounting?
• How does accumulated depreciation affect the assets on a company's balance sheet?
• What is the primary purpose of accounting?
• When are companies required to report their financial information?
• Why might the public be interested in the financial performance of businesses?
• Why is the revenue recognition principle significant?
• What financial aspect does the concept of goodwill generally indicate?
• Why is it important to reconcile bank statements?
• What is the significance of having a budgeted income statement for a business?
• How is net cash flow calculated?
• Which inventory valuation method is primarily linked to the principle of cost flow assumptions?
• How is earnings per share (EPS) calculated?
• What does the Sarbanes-Oxley Act aim to achieve?
• How is the cost of goods sold (COGS) defined?
• Which of the following best describes the income statement's content?
• What are accrued revenues?
• What does the term 'liability' refer to in accounting?
• What is the treatment for uncollectible accounts in accounting?
• How does a contra-liability account affect the balance of the corresponding liability?
• In financial reporting, what does a longer break-even analysis indicate?
• What do accrued liabilities represent in accounting?
• Which of the following would be considered an intangible asset?
• What is the balance of contra-liabilities?
• What is the purpose of an income tax provision?
• What is included in operating expenses?
• What is the main role of management accounting?
• What is the main purpose of an internal control system?
• What is depreciation in accounting?
• What is a trial balance used for?
• How is net income calculated?
• What is a break-even analysis used for?
• The Sarbanes-Oxley Act was enacted in response to which of the following?
• Explain the matching principle in accounting.
• What does the term "liquidity" refer to in accounting?
• What is considered an asset in accounting?
• What kind of information does the balance sheet provide?
• What part of current assets includes amounts due from customers?
• What is a budgeted income statement?
• Who does the Sarbanes-Oxley Act primarily protect?
• What do businesses typically use to generate revenue?
• In what way do financial statements assist investors?
• What is a journal entry in accounting?
• What is the significance of calculating gross profit?
• Which group of users is primarily concerned with the risk and return of investments?
• What is meant by the term "net asset value"?
• Notes receivable often contain which important feature?
• How is depreciation defined?
• Which of the following best defines assets?
• What is the primary objective of tax accounting?
• What does 'Assets' refer to?
• Which of the following best describes receivables from employees?
• What is the purpose of the statement of cash flows?
• Which of the following best describes the concept of equity?
• What is a contingency liability?
• What does financial information primarily capture and report?
• Assets listed on a balance sheet typically include all of the following EXCEPT?
• What does the bad debt allowance account represent?
• Which of the following is NOT a type of financial report?
• What defines current assets in an accounting context?
• The matching principle is based on which relationship?
• How can financial reports be best described?
• What are the two main components of tax accounting?
• What does ROI (Return on Investment) measure?
• What does GAAP stand for?
• How does an internal control system promote operational efficiency?
• In what manner does single-entry accounting differ from double-entry accounting?
• For asset and expense accounts, what is the normal balance?
• What does the term 'substantial doubt' refer to in accounting?
• If a cost cannot be linked to revenues or to an accounting period, how is the expense recorded?
• What is the difference between accounts payable and accounts receivable?
• What does the term "general journal" refer to in accounting?
• What is a subsidiary ledger?
• Which of the following statements about financial reports is correct?
• What does financial forecasting involve?
• Which metric is used to assess a company's ability to pay off current obligations?
• What can be inferred from a company's break-even point?
• What is meant by liquidity in financial terms?
• What does the matching principle require from a company?
• What does the term “consolidation” refer to in financial statements?
• What defines a journal entry in accounting?
• Which of the following is NOT one of the four main financial statements?
• What does a ledger represent in accounting?
• When are dividends declared?
• What is defined as an operating cycle?
• What does the matching principle in accounting state regarding expenses?
• Consolidated financial statements represent what?
• What characterizes the normal balance for liability, equity, and revenue accounts?
• What is considered goodwill in accounting?
• What is the purpose of Generally Accepted Accounting Principles (GAAP)?
• What is an audit?
• What role does tax planning play in accounting?
• Which user group evaluates financial statements to determine the repayment of loans?
• Who are considered users of financial statements?
• How is the term 'earnings' generally defined in financial reporting?
• Define an expense in accounting.
• What does the accounting equation define?
• Which financial statement would you refer to for understanding equity changes?
• How can net income be correctly calculated?
• What is the purpose of variance analysis?
• What is meant by a normal balance for an account?
• Which type of accounts are liabilities typically recorded under?
• What are operating expenses?
• Why are financial ratios important in accounting?
• What does the statement of cash flows report?
• Who are the main users of financial information?
• What is a fiscal year?
• What is retained earnings in accounting?
• Why are lenders interested in financial information?
• Which of the following statements about the income statement is true?
• What type of liabilities are described as amounts owed by a business?
• What is an example of a contra-account?
• What is the difference between gross profit and net profit?
• Receivables from employees and owners show advances due from which group?
• What is a trade discount?
• What does stock inventory reflect on a business's financial statements?
• What component is typically found in a budgeted income statement?
• What is the main purpose of a trial balance in accounting?
• What factor is crucial in determining ROI?
• What is the primary purpose of recording expenses in accounting?
• What defines tangible assets?
• What is one key difference between a sole proprietorship and a corporation?
• What are liquidity ratios used for?
• What is a key reason governments require financial statements from enterprises?
• What is the primary purpose of an income statement?
• Why is equity financing often preferred by startups?
• Securities are generally associated with which of the following?
• In accounting terms, what equation represents equity?
• What is the result of higher profit margins?
• What would indicate a company is in a strong liquidity position?
• What happens to retained earnings when cash dividends are declared?
• What types of accounts are typically included in a chart of accounts?
• What is the primary interest of suppliers and trade creditors regarding financial information?
• What is a contra asset account?
• In terms of tax planning, what is essential for businesses?
• What is the primary purpose of financial accounting?
• What is an amortization schedule?
• What is classified as an expense in accounting?
• What is an accounting policy?
• How do accounts payable differ from accrued liabilities?
• What is the difference between statutory and voluntary compliance in accounting?
• Which of the following best describes a balance sheet?
• How does the time value of money affect accounting practices?
• What principle underlies the treatment of notes receivable in accounting?
• What is the purpose of internal controls in accounting?
• How is profit margin typically defined?
• What is the primary purpose of a financial audit?
• In accounting, how is an intangible asset different from a tangible asset?
• Why are customers particularly interested in financial information about an enterprise?
• How can variance analysis benefit management decision-making?
• Which of the following is considered a current liability?
• Which type of account typically has a credit balance?
• What type of account typically enhances the understanding of financial statements for external parties?
• Which term refers to a business's ability to meet short-term obligations?
• An example of a liability is:
• What does capitalization in accounting refer to?
• What is the definition of a contra-account?
• What is a common consequence of discounted notes receivable in financial reporting?
• What does working capital indicate about a company?
• Which group of users is most likely concerned with short-term financial information?
• Which of the following best describes the goal of variance analysis?
• What is the significance of break-even analysis?
• In inventory accounting, what does FIFO stand for?
• On a balance sheet, assets are equal to the sum of which of the following?
• What can financial reporting help suppliers determine?
• What does the term 'liquidation' refer to in a business context?
• How are dividends treated in accounting?
• Which statement correctly describes the normal balance of accounts?
• Which statement describes a company’s liabilities?
• How is 'equity' defined in accounting terms?
• Which type of expense is recognized immediately due to its inability to be linked to specific revenues?
• What is the significance of recognizing accrued revenues?
• What are intangible assets?
• What is the purpose of a trial balance?
• When discounted notes are recorded, what is the necessary action?
• What is the purpose of a bank reconciliation?
• Which of the following best describes equity?
• What is the primary purpose of the cash flow statement?
• What does the income statement report?
• What information do employees seek from financial statements?
• What does the fundamental accounting equation represent?
• What formula represents working capital?
• Which financial statement shows a company’s financial position at a specific point in time?
• What is a limited liability company (LLC)?
• What does the matching principle in accounting refer to?
• What are liabilities in the context of accounting?
• What is accrual accounting?
• Which of the following indicates financial health on a balance sheet?
• What does the balance sheet provide?
• What are intangible assets?
• How is interest expense calculated?
• What is the primary definition of liabilities?
• Which item is NOT considered an asset?
• What is the primary goal of financial accounting?
• What is the advantage of standardized financial statements?
• An example of a long-term asset would be?
• What is a financial forecast?
• What does an income summary account do?
• What does a general ledger include?
• What is the main difference between cash basis and accrual basis accounting?
• What type of balance does a contra-asset account have?
• Which of the following best describes receivables?
• What are examples of accrued liabilities?
• Which of these items typically appears at the top of an income statement?
• What does conducting a variance analysis help identify?
• What is the primary function of the general ledger?
• Which of the following best describes long-term liabilities?
• What is meant by accounts receivable?
• Who are considered users of financial information?
• What is the accounting equation?
• What are adjusting entries primarily used for in the accounting cycle?
• What constitutes cash in accounting?
• What is the primary role of an auditor in the financial reporting process?
• What is the role of the Financial Accounting Standards Board (FASB)?
• What is the main purpose of a budgeting process in an organization?
• How does a budgeted income statement assist in performance evaluation?
• What factor does not influence stock inventory valuation methods?
• What does working capital indicate about a company?
• Which statement is true regarding the valuation of stock inventory?
• What can financial statements tell employees about their employer?
• What remains for the owners after liabilities are deducted from assets is known as?
• In accounting, what does the face value of notes receivable commonly indicate?
• What does equity financing involve?
• What do notes receivable represent for a business?
• What does the acronym CPA stand for?
• According to the revenue principle, when should revenue be recorded?
• Sales cause which of the following expenses?
• What is the main purpose of financial statement analysis?
• Long term or fixed assets are defined by which of the following characteristics?
• How are current assets differentiated from long-term assets?
• What does the concept of materiality in accounting refer to?
• What are current assets?
• Which of the following is considered a long-term asset?
• What is a dividend?
• What does a balance sheet primarily report?
• What is the experience method of inventory valuation?
• What significance does the budget variance hold in financial management?
• How does deferred revenue impact financial statements?
• What aspect of local economies can financial statements inform the public about?
• What do shareholders evaluate from financial statements?
• Which of the following are considered components of liabilities?
• Why are internal controls vital for organizations?
• Which statement best describes financial audits?
• What key aspect of businesses does tax planning address?
• What needs to be adjusted when dealing with discounted notes receivable?
• What does a budget variance indicate?
• What is a primary purpose of financial statements for the public?
• When assessing the liquidity of a business, which components are essential?
• What does a chart of accounts represent?
• What does "deferred revenue" indicate?
• What distinguishes fixed costs from variable costs?
• How is working capital defined?
• What does the term "budgeted" refer to in a budgeted income statement?