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 borrows $10,000 from a bank on a 6-month, 8% note payable. How much interest will accrue over the 6-month term?
Answer: $400
Interest = Principal × Rate × Time = $10,000 × 8% × (6/12) = $400.
Which of the following is classified as an operating activity on the statement of cash flows?
Answer: Collection of accounts receivable
Collecting accounts receivable is a cash inflow from operating activities because it relates to the company's primary revenue-generating operations.
What does the term 'net realizable value' refer to in the context of inventory?
Answer: The estimated selling price minus costs to complete and sell
Net realizable value (NRV) is the estimated selling price in the ordinary course of business less the estimated costs of completion and selling.
Which ratio measures a company's ability to pay interest on its outstanding debt?
Answer: Times interest earned ratio
Times Interest Earned = EBIT / Interest Expense, measuring how many times operating income covers interest obligations.
Deferred revenue on the balance sheet represents:
Answer: Cash received for services not yet performed
Deferred revenue is a liability representing cash received from customers before the company has fulfilled its obligation to provide goods or services.
Under the perpetual inventory system, Cost of Goods Sold is recorded:
Answer: Each time a sale is made
A perpetual inventory system updates inventory and records COGS at the point of each sale, maintaining a continuous running balance.
Which of the following transactions would increase total stockholders' equity?
Answer: Net income for the period
Net income increases Retained Earnings, which is a component of stockholders' equity, thereby increasing total equity.