About Chart of Accounts

In a company's general ledger, a chart of accounts (COA) serves as an index to all of the financial accounts. An accounting period's financial transactions are broken down into subcategories and presented in an easy-to-understand format in a company's financial statement.

A chart of accounts, to put it another way, is a list of the names of the accounts that a business has recognized and made available for recording transactions in its general ledger. As a firm grows, it has the ability to add accounts to its chart of accounts as needed.

Preparation of COA

The accounting chart of accounts might be based on the company's organizational chart. It is possible that each department of a firm will be responsible for its own expenditures if the organization has 10 divisions (manufacturing, marketing, human resources, etc). (salaries, supplies, phone, etc.). Each department will be responsible for paying its own phone bills, salary costs, and so forth.

A company's chart of accounts is likely to be equally extensive and complex. Thousands of accounts may be required by a large worldwide business with several subsidiaries, whereas just 100 accounts may be required by a small, local store.

Purpose of a COA

For investors and shareholders, a company's chart of accounts (COA) makes it easier to see how the company's finances are doing and how healthy they are. Assuring that financial statements adhere to reporting requirements can be accomplished in part through the separation of expenses from income and assets from liabilities (A/L).

Each chart of accounts normally includes a name, a brief description, and a unique identifier for each account. All asset accounts, for example, begin with the number 1. Each chart in the list has its own unique number.

Following are some of the multiple choice questions on the Chart of Accounts with answers that will help the students in developing their knowledge.

Chart of Accounts MCQ

1. Which of the following best describes the operative chart of accounts?

  • Use to enable companies to meet special
  • Country-specific reporting requirements
  • Contains only accounts receivable transaction
  • Both (a) & (b)

2. A mechanical task involving the collection of basic financial data.

  • ACCOUNTING
  • BOOKKEEPING
  • MANAGEMENT
  • BUSINESS

3. The trial balance is …………………………..

  • Is used to prove that there are no errors in the journal or ledger
  • Is a formal financial statement
  • Provides a listing of the balance of each account in active use.
  • Provides a listing of every account in the chart of accounts.

4. The following comments each relate to the recording of journal entries. Which statement is true?

  • It is customary to record credits on the left and debits on the right.
  • Journalization is the process of converting transactions and events into debit/credit format.
  • For any given journal entry, debits must exceed credits.
  • The chart of accounts reveals the amount to debit and credit to the affected accounts.

5. A chart of accounts generally start with which of the following types of accounts?

  • liability accounts
  • Cash accounts
  • Assets accounts
  • Revenue accounts

6. The business owner uses business funds to pay his son's school fees. What category is this?

  • Liabilities
  • Equity
  • Expenses
  • None of these

7. Which category do you think wages would go under?

  • Expenses
  • Income
  • Equity
  • None of these

8. Which category do you think an insurance loan would go under?

  • Liabilities
  • Expenses
  • Assets
  • Both a & b

9. What equation does the chart of accounts tie-in with?

  • Wave equation
  • Accounting equation
  • complex numbers
  • None of these

10. The chart of accounts has a list of:-

  • General ledger account names and numbers
  • General ledger account name
  • Names of customers and suppliers
  • Names of each inventory item

11. The chart of accounts is a listing of the accounts presently having balances in the general ledger.

  • True
  • False

12. Merchandise Inventory is considered a

  • Current Asset
  • Non current Asset

13. According to a Balance sheet, Assets are divided into two sections.

  • Current and reliable Assets
  • Non reliable and reliable Assets.
  • Current and non current Assets
  • none of the above

14. In the case of returning merchandise, Merchandise Inventory is recorded as

  • Debit
  • Credit

15. Insurance is recorded on Income Statement as

  • Liability
  • Expense

16. Revenue and Expenses are recorded on

  • Balance sheet
  • Statement of Owners Equity
  • Income statement
  • none of the above

17. A delivery van would be considered

  • Non Current Liability
  • Non Current Asset

18. Assets, Liabilities and Owners Equity are recorded on

  • Income statement
  • Statement of owners equity
  • Balance sheet
  • none of the above

19. Calculation to determine Profit

  • Revenue - Expenses
  • Assets - Liabilities

20. Accounts Payable are a

  • Current Liability
  • Non Current Liability

21. Delivery Expense is recorded as

  • Debit
  • Credit

22. Expenses

  • 200
  • 300
  • 400
  • 500

23. Owner's Equity

  • 100
  • 200
  • 300
  • 400

24. Liabilities

  • 100
  • 200
  • 300
  • 400

25. Which asset account should be listed first because it is the most frequently used account?

  • Cash
  • Accounts Reeceivable
  • Supplies
  • Prepaid Insurance

26. Which of the following accounts should be listed first in the Expenses section?

  • Miscellaneous Expense
  • Rent Expense
  • Advertising Expense
  • Utilities Expense

27. If you need to add a new account to an existing chart of accounts between account numbers 510 and 520 you should use....

  • 511
  • 515
  • 519
  • 525

28. Revenues

  • 200
  • 300
  • 400
  • 500

29. Assets

  • 100
  • 200
  • 300
  • 400

30. It encompass the conventions, rules and procedures necessary to define accepted accounting practice at a particular time

  • GAAP
  • GAP
  • GAPP
  • GPP

31. Among the choices, which is not an example of forms of business?

  • SOLE PROPRIETORSHIP
  • PARTNERSHIP
  • LEADERSHIP
  • CORPORATION

32. Which among the choices is not considered as type of business?

  • MANUFACTURING
  • MERCHANDISING
  • SERVICE
  • PRODUCT

33. The art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of a financial character, and interpreting the results thereof

  • ACCOUNTING
  • BOOKKEEPING
  • MANAGEMENT
  • BUSINESS

34. The break-even chart is:

  • A graphical method that measures the difference between the break-even level of output and the actual level of output
  • A snapshot of the financial of a firm and is used to calculate a firm's net worth
  • A graphical method that measures the value of a firm's costs and revenues against a given level of output
  • A method that estimates the length of time required for an investment to pay back its initial cost outlay

35. The method that measures the annual net return on an investment and assesses the profitability generated by a project over a period of time is known as:

  • The payback period
  • The average rate of return
  • Net present value
  • Net profit margin

36. Money spent to acquire items in a business that will last for more than a year is known as:

  • Revenue expenditure
  • Capital expenditure
  • Retained profit
  • Personal funds

37. Money spent on the day-to-day running of a business is known as:

  • Fixed assets
  • Long-term investments
  • Revenue expenditure
  • Sale of assets

38. Share capital is also known as:

  • Loan capital
  • Overdrafts
  • Equity
  • Subsidies

39. Financial assistance granted by a government, a non-governmental organization or an individual to support business enterprises that are in the public interest are:

  • Grants
  • Subisidies
  • Business angels
  • Overdrafts

40. Which of the following are medium-term finance?

  • Bank overdrafts and trade credit
  • Leasing and grants
  • Share capital and debt factoring
  • Trade credit and leasing

41. Which of the following are fixed costs?

  • Rent, insurance and salaries
  • Rent, insurance and sales commissions
  • Energy usage costs, rent and salaries
  • Packaging, interest payments and insurance

42. Which of the following are indirect costs?

  • Interest on loans, raw materials and direct labour
  • Interest on loans, advertising expenditure and legal expenses
  • Rent, packaging costs and raw materials
  • Rent, office staff salaries and direct labour

43. The right formula to calculate the profit is:

  • Contribution per unit ×number of units sold Contribution\ per\ unit\ \times number\ of\ units\ sold\ Contribution per unit ×number of units sold
  • Total revenue −total variable cos⁡tTotal\ revenue\ -total\ variable\ \cos tTotal revenue −total variable cost
  • Total contribution −total fixed cos⁡ts Total\ contribution\ -total\ fixed\ \cos ts\ Total contribution −total fixed costs
  • Total contribution −total fixeds cos⁡ts −total variables cos⁡tsTotal\ contribution\ -total\ fixeds\ \cos ts\ -total\ variables\ \cos tsTotal contribution −total fixeds costs −total variables costs

44. T2 untuk pembelian Printer seharga 3 juta adalah

  • 81001
  • 81103
  • 81121
  • 81123

45. T2 untuk pembelian Kasur untuk staff adalah

  • 81001
  • 81123
  • 81124
  • 81125

46. T2 untuk pembelian motor kantor seharga USD1,500

  • 81105
  • 81125
  • 81126
  • 88004

47. T2 untuk pembelian masker untuk program penanganan COVID

  • 81501
  • 81502
  • 81507
  • 81508

48. Account 80201 pada T2 dipakai untuk

  • Travel Local Staff dalam rangka training staff
  • Akomodasi staff dalam rangka training staff
  • Akomodasi staff dalam rangka rapat staff
  • Fee Fasilitator untuk training staff

49. Account 84006 pada T2 dipakai untuk biaya

  • Peralatan security misalnya seragam satpam
  • Oursourcing Security
  • Oursourcing Janitor
  • Perbaikan kantor

50. T2 untuk penginapan staff dalam rangka training staff

  • 80201
  • 82001
  • 82002
  • 82080

Enjoyed the Quiz. Share this with friends

Comments

Add Your Review

Your email address will not be published.

Subscribe to Newsletter!

Subscribe to get latest updates and information.