Accounting Flashcards
7 cards from real Robert Half Assessment Test practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Accounting flashcards as text
A company purchases equipment for $50,000 with a salvage value of $5,000 and a useful life of 9 years. What is the annual straight-line depreciation?
Answer: $5,000
Straight-line depreciation = (Cost − Salvage) / Useful life = ($50,000 − $5,000) / 9 = $5,000 per year.
Which financial statement shows a company's revenues and expenses over a specific period?
Answer: Income Statement
The Income Statement (Profit & Loss Statement) reports revenues, expenses, and net income for a defined accounting period.
Under the accrual basis of accounting, revenue is recognized when:
Answer: It is earned, regardless of when cash is received
Accrual accounting requires revenue recognition when earned and realizable, not when cash changes hands.
What does a credit entry to Accounts Receivable indicate?
Answer: A customer payment received
Crediting Accounts Receivable reduces the asset balance, which occurs when a customer pays their outstanding balance.
The FIFO inventory method assumes that:
Answer: The oldest inventory items are sold first
FIFO (First-In, First-Out) assumes the oldest inventory purchased is the first to be sold and expensed.
Which of the following is an example of a contra asset account?
Answer: Accumulated Depreciation
Accumulated Depreciation offsets the related fixed asset account, making it a contra asset with a normal credit balance.
If total assets are $200,000 and total liabilities are $75,000, what is stockholders' equity?
Answer: $125,000
Using the accounting equation: Equity = Assets − Liabilities = $200,000 − $75,000 = $125,000.