[ CPALE 2 ] Certified Public Accountant Licensure Exam Reviewer II

Certified Public Accountant Licensure Exam Reviewer

Instructions:

Please answer each question to the best of your ability. Each question is multiple choice, and only one answer per question is correct. Select the most appropriate answer from the options provided. There are 20 questions in total.

When you have completed all questions, click the "Submit" button at the bottom of the page to see your score. Good luck!

What does GAAP stand for?

A) Generally Accepted Accounting Principles
B) General Accounting and Audit Practices
C) Generally Accepted Auditing Procedures
D) General Analysis of Accounting Principles

Which financial statement shows a company's assets, liabilities, and equity at a specific point in time?

A) Income Statement
B) Cash Flow Statement
C) Balance Sheet
D) Statement of Retained Earnings

What is the normal balance of an asset account?

A) Debit
B) Credit
C) Neither
D) Both

Which of the following accounts typically has a credit balance?

A) Cash
B) Accounts Payable
C) Inventory
D) Accounts Receivable

What is the accounting equation?

A) Assets = Liabilities + Equity
B) Assets + Liabilities = Equity
C) Assets = Liabilities - Equity
D) Liabilities = Assets + Equity

What is the purpose of a trial balance?

A) To prepare financial statements
B) To ensure that debits equal credits
C) To record transactions
D) To calculate net income

What is depreciation?

A) Allocation of the cost of a tangible asset over its useful life
B) The increase in value of an asset over time
C) A one-time expense for purchasing an asset
D) The difference between the purchase price and selling price

Which accounting method recognizes revenue when cash is received?

A) Cash Basis Accounting
B) Accrual Basis Accounting
C) Modified Cash Basis Accounting
D) Financial Reporting Accounting

What is the purpose of an audit?

A) To verify the accuracy of financial statements
B) To prepare tax returns
C) To analyze business performance
D) To assess internal controls

What type of account is "Sales Revenue"?

A) Revenue Account
B) Asset Account
C) Liability Account
D) Expense Account

Which document summarizes a company's financial performance over a specific period?

A) Balance Sheet
B) Income Statement
C) Cash Flow Statement
D) Statement of Changes in Equity

What is the effect of a debit entry in an asset account?

A) It increases the asset
B) It decreases the asset
C) It has no effect on the asset
D) It converts the asset to a liability

What is a ledger?

A) A summary of all transactions for a specific period
B) A book or digital record of all accounts
C) A document used to file taxes
D) A report summarizing financial performance

Which of the following is an example of an operating expense?

A) Rent Expense
B) Equipment Purchase
C) Land Acquisition
D) Stock Investment

What is the term for the cost incurred to obtain a loan?

A) Principal
B) Interest
C) Amortization
D) Premium

What is the primary purpose of financial accounting?

A) To provide financial information to external users
B) To prepare budgets for internal management
C) To record daily transactions
D) To ensure compliance with laws

What is the purpose of the cash flow statement?

A) To report the cash inflows and outflows of a business
B) To summarize revenues and expenses
C) To list assets and liabilities
D) To show changes in equity

What type of accounting focuses on the preparation of tax returns?

A) Financial Accounting
B) Managerial Accounting
C) Tax Accounting
D) Cost Accounting

Which of the following is considered a long-term asset?

A) Inventory
B) Property, Plant, and Equipment
C) Accounts Receivable
D) Cash

What is the main purpose of internal controls in accounting?

A) To ensure the reliability of financial reporting
B) To increase sales
C) To minimize expenses
D) To promote ethical behavior

Result

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