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US CPA Financial Accounting — practice questions

Explore 27 free Financial Accounting questions in US CPA Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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Financial Accounting questions and exercises with answers

Showing questions 1–27 of 27.

A firm of accountants sells advice rather than goods, so it holds no:Read the answer and worked solution →The time from spending cash to collecting payment from the customer is the operating:Read the answer and worked solution →A retailer that resells finished goods produced by a manufacturer is a:Read the answer and worked solution →Deducting cost of goods sold from net sales gives:Read the answer and worked solution →Merchandising transactions fall into sales and:Read the answer and worked solution →Shipping charges, taxes and insurance on goods bought for resale are added to:Read the answer and worked solution →Invoice terms of 2/10, n/30 give a discount rate of:Read the answer and worked solution →A retailer paying after the discount window still owes the:Read the answer and worked solution →Purchase discounts come in two kinds: trade discounts and discounts that are:Read the answer and worked solution →The original sale amount before any discounts, returns or allowances is:Read the answer and worked solution →Sales Discounts carries a normal debit balance, which makes it a contra:Read the answer and worked solution →When a customer returns goods, the retailer issues a:Read the answer and worked solution →An inventory system updating the account on every single sale or purchase is:Read the answer and worked solution →An inventory system updating the account only at scheduled times is:Read the answer and worked solution →Under FOB destination terms, the shipping charges are paid by the:Read the answer and worked solution →Under FOB shipping point terms, the shipping charges are paid by the:Read the answer and worked solution →An income statement listing each revenue and expense account separately is called:Read the answer and worked solution →Advertising and office supplies costs, not tied to direct selling, are called:Read the answer and worked solution →A statement combining all revenues into one category and all expenses into another is:Read the answer and worked solution →Catch the retail accountsRead the answer and worked solution →Pop the sale reductionsRead the answer and worked solution →Run the retail gatesRead the answer and worked solution →Slice the retail wordsRead the answer and worked solution →Buyer or seller paysRead the answer and worked solution →Sort the retail wordsRead the answer and worked solution →Type the numberRead the answer and worked solution →Merchandising bingoRead the answer and worked solution →

Worked practice questions

A firm of accountants sells advice rather than goods, so it holds no:

  1. Inventory
  2. Insurance
  3. Interest
  4. Invoices
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Correct answer: A. Inventory

1. Service companies provide intangible services. 2. Nothing physical is bought in and resold. 3. So they hold no inventory. _Source: OpenStax Principles of Financial Accounting, Chapter 6, Merchandising Transactions._

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The time from spending cash to collecting payment from the customer is the operating:

  1. Cushion
  2. Cycle
  3. Ceiling
  4. Charter
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Correct answer: B. Cycle

1. It runs from cash out to cash back in. 2. A shorter one leaves the firm more stable. 3. That span is the operating cycle. _Source: OpenStax Principles of Financial Accounting, Chapter 6, Merchandising Transactions._

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A retailer that resells finished goods produced by a manufacturer is a:

  1. Merchandising company
  2. Measuring company
  3. Mediating company
  4. Monitoring company
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Correct answer: A. Merchandising company

1. It buys completed goods rather than making them. 2. It then sells them on to customers. 3. That is a merchandising company. _Source: OpenStax Principles of Financial Accounting, Chapter 6, Merchandising Transactions._

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More Accounting topics

AccountingInventoryMerchandising Transactions