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
Which inventory costing method is NOT permitted under IFRS?
Answer: LIFO
LIFO (Last-In, First-Out) is prohibited under IFRS because it can significantly understate inventory values and distort financial results.
A company has net credit sales of $500,000 and average accounts receivable of $62,500. What is the accounts receivable turnover ratio?
Answer: 8 times
AR Turnover = Net Credit Sales / Average AR = $500,000 / $62,500 = 8 times.
What is the effect on the accounting equation when a company pays a previously recorded account payable?
Answer: Assets decrease; liabilities decrease
Paying an account payable reduces Cash (asset) and reduces Accounts Payable (liability) by equal amounts, keeping the equation balanced.
Which of the following would appear on a post-closing trial balance?
Answer: Retained Earnings
After closing entries, only permanent (real) accounts remain — Retained Earnings is a permanent account that carries forward to the next period.
Gross profit is calculated as:
Answer: Net Sales minus Cost of Goods Sold
Gross Profit = Net Sales − Cost of Goods Sold, representing profit before operating expenses are deducted.
When a company issues common stock for cash, the journal entry includes:
Answer: Debit Cash; Credit Common Stock
Issuing stock for cash debits Cash (asset increases) and credits Common Stock (equity increases).
The matching principle in accounting states that:
Answer: Expenses should be recognized in the same period as the revenue they help generate
The matching principle requires that expenses be recorded in the same accounting period as the related revenues they helped produce.