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Accounting Principles Test: Check Your Understanding

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This Principles of Accounting quiz helps you review key topics and spot gaps fast. Practice debits and credits with our debit and credit quiz, build confidence on entries with a journal entry quiz, and round out your base with a fundamentals of accounting quiz - then see instant results here to guide your next study step.

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1Which accounting equation must always balance?
2In a double-entry system, how does a debit affect an asset account?
3Revenue is recognized under accrual accounting when
4The primary purpose of the trial balance is to
5Which of the following is a contra-asset account?
6Which inventory cost flow assumption results in earliest costs to cost of goods sold when prices are rising?
7The allowance method for bad debts records bad debt expense
8Which depreciation method typically yields a constant expense each period?
9Sales returns and allowances is normally
10Which item is included in cash equivalents?
11Bond issued at a discount means
12Which of the following is NOT a component of internal control?
13A contingent liability should be accrued only when
14Goodwill is recognized on the balance sheet when
15Which inventory costing method generally yields the highest ending inventory in a period of rising prices?
16Comprehensive income includes all changes in equity except those from owner transactions.
17A deferred tax liability arises when taxable income is less than pretax financial income due to temporary differences.
18Under the equity method, the investor recognizes income when cash dividends are received.
19A lease classified as finance (capital) results in recognizing both a right-of-use asset and a lease liability at commencement.
20OCI items bypass the income statement permanently and never affect retained earnings.
Learning Goals

Study Outcomes

  1. Understand core accounting principles -

    Grasp how debits and credits function within double-entry bookkeeping and why they're essential for accurate financial records.

  2. Apply journal entries to transactions -

    Practice recording typical business events in T-accounts and ledgers to reinforce your skills for the principles of accounting test.

  3. Analyze financial statements -

    Break down income statements, balance sheets, and cash flow statements to interpret key metrics and financial health indicators.

  4. Evaluate trial balances and reconciliations -

    Identify and correct discrepancies in trial balances to ensure debits and credits are properly aligned.

  5. Interpret accounting final exam questions and answers -

    Review sample questions and model answers to pinpoint areas for improvement before the accounting final exam.

  6. Prepare confidently for the accountant 1 exam -

    Build exam readiness and boost your confidence by testing your knowledge under timed conditions similar to the principles of accounting 1 final exam.

Study Guide

Cheat Sheet

  1. Double-Entry System & Accounting Equation -

    Every transaction affects at least two accounts, maintaining the equation Assets = Liabilities + Equity. For your principles of accounting 1 final exam, practice by recording sample transactions from a university accounting department's case studies. Remember that mastering this framework is foundational for any principles of accounting test.

  2. Debits vs. Credits Rules (DEAD/LCR) -

    Use the mnemonic "DEAD" for Debits increasing Dividends, Expenses, Assets, and "LCR" for Credits increasing Liabilities, Capital, Revenue. Working through accounting final exam questions and answers from sources like Yale's SOM tutorials helps reinforce which side to post each account. Consistent practice with T-accounts will boost your confidence for the accountant 1 exam.

  3. Preparation of Core Financial Statements -

    Review the structure and linkages among the Income Statement, Statement of Retained Earnings, Balance Sheet, and Cash Flow Statement as outlined by FASB. A common practice question is deriving net income from revenues and expenses, then reconciling it to ending equity for your principles of accounting test. Seeing how line items flow between statements will help you ace the final exam format.

  4. Accrual vs. Cash Basis Accounting -

    Understand that under accrual accounting you recognize revenue when earned and expenses when incurred, as per IFRS and GAAP guidelines. Compare sample journal entries - like unearned revenue or prepaid expense adjustments - to cash basis entries to see timing differences. This clarity will help you tackle tricky accountant 1 exam scenarios about adjusting entries.

  5. Cost Principle & Depreciation Methods -

    Assets must be recorded at cost, and depreciation allocates that cost over useful life; use the straight-line formula: (Cost − Residual Value) ÷ Useful Life. Practice with equipment purchase examples from university repository problems to calculate annual depreciation. Familiarity with both straight-line and accelerated methods is a must for your accounting final exam questions and answers.

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Updated Feb 23, 2026