• forward arrow
    Main Menu

  • Book & Article Categories

  • forward arrow
    Main Menu

  • Book & Article Categories

Home
Business, Careers, & Money Books
Business Books
Accounting Books
General Accounting Books
Kenneth W. Boyd
Kate Mooney
|
Published:
April 13, 2015

Accounting: 1,001 Practice Problems For Dummies

Buy Now
Subscribe on Perlego
Engage with Book

Overview

Get up to speed quickly—review and practice major concepts in accounting!

Whether you're looking to improve your classroom experience, or simply become more familiar with accounting concepts, 1,001 Accounting Practice Problems For Dummies is the hands-on tool you need to get a step ahead. The book's practice questions and review content go hand-in-hand with the content offered in Accounting For Dummies, ensuring that you have a working knowledge of the most important concepts and skills in accounting.

This practical resource gives you access to tons of helpful online content, including practice problems in multiple-choice format, and customizable practice sets for self-directed study, all available on the go through your smartphone, laptop, or tablet. Practice problems are categorized as easy, medium, or hard, so you can build your knowledge at your own pace. A perfect companion for anyone looking to increase their accounting skills, this book has the added benefit of offering review and practice useful for individuals looking to pass their accounting courses and lay the groundwork for an accounting career.

  • Filled with practice questions, review content, tips, and explanations for anyone interested in accounting principles
  • Includes tons of online practice content, such as multiple choice questions and customizable practice sets, all available with purchase of the book
  • Ideal for individuals looking to pass an accounting class or start a career in accounting
  • Serves as an excellent companion resource to Accounting For Dummies

Packed with endless practice opportunities, 1,001 Accounting Practice Problems For Dummies has everything you need to jumpstart your journey into accounting and financial documentation.

Read More

About The Author

Kenneth Boyd is the owner of St. Louis Test Preparation (www.stltest.net). He provides online tutoring in accounting and finance. Kenneth has worked as a CPA, Auditor, Tax Preparer, and College Professor. He is the author of CPA Exam For Dummies. Kate Mooney has been teaching accounting to both undergraduates and MBA students at St. Cloud State University since 1986, after earning her PhD from Texas A & M University. She is a licensed CPA in Minnesota and is a member of the State Board of Accountancy.

Sample Chapters

Read Sample
accounting 1,001 practice problems for dummies

CHEAT SHEET

Accounting, as you may guess, involves a lot of math. As you practice various types of accounting problems, and when you begin doing accounting work for real, you will need to utilize various formulas to calculate the information you need.10 useful accounting formulasThe following are some of the most frequently used accounting formulas.
View Cheat Sheet
View Cheat Sheet

HAVE THIS BOOK?

View Book Companion Site
Access practice tests
Additional Book Resources

Articles from
the book

Accounting, as you may guess, involves a lot of math. As you practice various types of accounting problems, and when you begin doing accounting work for real, you will need to utilize various formulas to calculate the information you need.10 useful accounting formulasThe following are some of the most frequently used accounting formulas.
Read More
Read More
The following are some of the most frequently used accounting formulas. This list is not comprehensive, but it should cover the items you’ll use most often as you practice solving various accounting problems. Balance sheet formula Assets – liabilities = equity (or assets = liabilities + equity) This basic formula must stay in balance to generate an accurate balance sheet.
Read More
Read More
Prepaids are expenses that are paid in advance, where the expense has not been incurred or used yet. In the following practice questions, you are asked to make the correct journal entries for prepaid insurance. Practice questions On July 1, a business paid $22,000 for six months of general liability insurance effective July 1.
Read More
Read More
When an accountant records journal entries for a business, he records these entries as debits and credits, and they must balance. Here are a couple of practice questions to help you hone your journal entry — and balancing — skills. Practice questions What is the journal entry to record a collection of $2,000 of outstanding accounts receivables?
Read More
Read More
When customers buy products on credit or on account, the transaction is recorded in accounts receivable. In the following practice questions, you are asked to record purchases made on account, both with and without a down payment. Practice questions A company makes a $25,000 sale on account. The company expects that $10,000 will be collected within a week and the balance within a month.
Read More
Read More
You can determine how much cash is generated from a company's operating activities based on its net income, depreciation expense, and accounts receivable and payable. The following questions ask you to calculate cash from operating expenses in two different scenarios. Practice questions During a year, a company reports a net income of $155,000, a depreciation expense of $35,000, an accounts receivable increase of $25,000, and an accounts payable increase of $10,000.
Read More
Read More
Cash-basis accounting posts income and expenses solely based on cash inflows and cash outflows—in other words, when cash exchanges hands. Accrual-basis accounting records revenues when earned and expenses when they occur, and not when cash exchanges hands. Here are two practice questions to show the difference.
Read More
Read More
When you know a company's current assets and liabilities, you can use this information to measure the company's ability to pay its current obligations. To do this, you first need to calculate the company's current ratio. The formula for calculating the current ratio is current assets divided by current liabilities.
Read More
Read More
When a company asks their accountant to determine the cost of producing goods they have sold, the results will depend on their choice of inventory valuation method. The following practice questions use the LIFO method and the average cost method. Practice questions Use the following information to answer the next two questions: Placebo Clip-On Tie Company had one tie in inventory at the beginning of the year, and it cost $5.
Read More
Read More
The debt-to-equity ratio tells you how much debt a company has in relation to its equity. So, which is better: a higher or a lower ratio? If you think you know, then you can test your knowledge with the following practice questions. Practice questions How do you calculate the debt-to-equity ratio? Which of the following statements is incorrect?
Read More
Read More
A journal entry is a record of transactions that includes the date of each transaction, the account numbers, account names, and amounts to be debited and credited. When an accountant looks at a journal entry, she can decipher what happened in that transaction. Here are a couple of practice questions to test whether you can translate a journal entry into English.
Read More
Read More
When you borrow money, and the interest is charged more often than annually, this is called compounding. As a result, the effective interest rate will be more than the annual rate. The following practice questions require you to calculate the effective rate of loans where the interest is compounded quarterly. Practice questions Use the following information to answer the questions.
Read More
Read More
You may be asked to calculate the expected balance of accounts receivable or the inventory balance for your company at the end of the year. If you've never done this before, don't panic: the following practice questions will show you the basics. Practice questions Use the following financial information about a company for 2014 to answer the questions: Annual sales: $13,000,000 Annual cost of goods sold: $7,150,000 Historically, accounts receivable at the end of the year equal about 3 weeks of annual sales.
Read More
Read More
Profit and loss affect your company's total assets, total liabilities, and owners' equity in different ways. Here are a couple of practice problems to show how this relationship works. Practice questions Badabing only makes cash sales to its customers and pays all expenses in cash as incurred. During the year, sales were $53,000, and expenses were $42,000.
Read More
Read More
After you create financial statements, you need some tools to analyze a company’s results. Following are the most frequently used formulas to analyze financial statements. Get familiar with them so that you can analyze statements with confidence. Components of work-in-process Direct materials + direct labor + factory overhead applied Work-in-process (WIP) represents cost incurred in production for partially completed goods.
Read More
Read More
Gross margin and contribution margin tell two different stories based on the same sales numbers. To calculate the gross margin, you subtract cost of goods sold from sales. To find the contribution margin, you subtract cost of goods sold and variable costs from sales. The following practice problems show the results for the two types of margins.
Read More
Read More
An accountant calculates profit by summing up all revenues and subtracting all expenses. When a company's revenues increase, this affects its assets in a positive way. The following practice questions look at how sales revenues increase the assets of a company. Practice questions What is the impact of an increase in sales revenues on the balance sheet?
Read More
Read More
An accountant is responsible for capturing business transactions, and determining the financial effect of those transactions on a company's balance sheet. Using the following balance sheet, see if you can calculate the impact of different transactions on a fictitious power company. Practice questions Use the following information to answer the questions.
Read More
Read More
To calculate the amount of cash provided by a company's operating activities, you need to consider net income, accounts payable, and accounts receivable. The following practice questions provide two different scenarios and ask you to add up the cash from operating activities. Practice questions During a year, a company reports a net income of $20,000 and an accounts payable increase of $5,000.
Read More
Read More
Whenever a company buys inventory, their accountant has to record the results of these transactions in different ways. The following practice questions show how an increase in the cost of goods sold can impact a balance sheet. Practice questions Use the following information to answer the questions: A company has depreciation expense of $1,200 and inventory purchases of $10,000.
Read More
Read More
When you give your customers the option to make purchases with credit cards, you will probably see an increase in sales. However, you will also have to make additional journal entries when you record these sales. The following practice questions test you on the proper way to record sales and fees for credit card transactions.
Read More
Read More
When making journal entries for a manufacturing company, you need to consider all manufacturing costs, including direct materials, direct labor, and overhead. The following practice questions ask you to make the correct journal entries for two different companies. Practice questions Amazing Key Chains produces and sells truly amazing devices that combine a garage door opener and a cellphone.
Read More
Read More
Companies typically adjust journal entries as part of the end-of-period accounting process. These adjustments are necessary to make final entries for the year and ensure that the company's financial statements are accurate and complete. The following practice questions offer some useful examples of journal entry adjustments.
Read More
Read More
The balance sheet reports a company's assets, liabilities, and equity as of a specific date. This is different from an income statement, which covers a period of time. The following example questions ask you to calculate a company's total liabilities and total equity on a given day. Practice questions Use the following information to answer the questions.
Read More
Read More
After you create financial statements, you need some tools to analyze the company’s results. Following are some additional formulas accountants use to analyze financial statements. Become familiar with these formulas, and use them as you practice various accounting problems. Burden rate Fixed manufacturing costs ÷ units produced Fixed costs can’t be directly traced to a unit produced.
Read More
Read More
When you calculate a company's annual net income, you have to consider the company's assets, liabilities, and whether cash dividends or new stock have been issued. The following practice questions ask you to calculate annual net income, with and without cash dividends. Practice questions At the end of its first year, a company estimates its end-of-year balances to be: Total assets: $2,500,000 Total current liabilities: $800,000 Total long-term liabilities: $200,000 If there are no other equity transactions, what is the net income for the year?
Read More
Read More
It is very important for a manufacturer to know the unit price, unit cost, and fixed costs of each product they make. This information helps them to determine how many units they have to sell to break even or to make a profit. The following practice questions ask you to calculate the sales requirements both to make a profit and to break even.
Read More
Read More
If you know the manufacturing costs of a product, and how many units you have produced and sold, then you can determine the per-unit cost. The following practice questions walk you through the process. Practice questions Goody Picnic Tables Inc. has the following per-unit information: Selling price: $450 Raw materials used to construct the product: $95 Labor to build the product: $75 Overhead associated with building the product: $14 Sales commission: $25 Administrative costs: $12 The company produced 250 units and sold 240.
Read More
Read More
Product costs are included in the cost of a product. These costs become expenses when the product is sold. Period costs, on the other hand, are expensed immediately when they're incurred. In the following practice questions, you're asked to separate period costs from product costs for one company, and then to tally up product costs for another.
Read More
Read More
An accountant uses depreciation is to allocate the cost of a fixed asset over the years of its useful life. The straight-line depreciation method is the most popular type because it allocates the same amount of depreciation to each year the asset is in use. The following practice questions show the straight-line depreciation method in action.
Read More
Read More
You need to be careful when using the accounting equation because there are two versions of the formula. One is assets – liabilities = equity. The other is assets = liabilities + equity. Keep in mind which version you’re using. Here are a couple of practice questions to help you get familiar with this formula.
Read More
Read More
Manufacturing costs are directly associated with production; they include direct materials, direct labor, variable overhead, and fixed overhead. A manufacturer will use this information to determine the cost of their product. In the following practice questions, you are asked to weed out the non-manufacturing costs and then calculate the total manufacturing costs for two different companies.
Read More
Read More
Companies record their cost of goods sold in different ways, depending on whether the goods they sell are unique or fungible (that's business-speak for 'indistinguishable from each other'). So how do you tell a unique good from a fungible good? Don't worry: you can sharpen your skills of discernment with the following practice questions.
Read More
Read More
Work-in-process refers to the costs incurred for a partially completed product; these costs are recorded in an inventory (asset) account. The following practice questions ask you to determine how work-in-process inventory is affected by production costs. Practice questions UnderStuff Clothing Company has the following costs during the month: Cotton knit fabric added to production: $45,000 Sewing machine operators' wages: $30,000 Electricity to run the machines, cool the factory, and light the factory: $2,000 Factory manager's salary: $3,000 Elastic and thread used in making the garments: $1,500 Insurance on the factory: $200 CEO's salary: $40,000 Wages for the accounting department: $22,000 Advertising: $3,000 Depreciation on the sewing machines: $2,100 By how much will the Work-in-Process Inventory account increase as a result of these costs?
Read More
Read More
Load More Articles

Related Books

0:00
0:00
Listen now
Pause
https://cdn.prod.website-files.com/6630d85d73068bc09c7c436c/69195ee32d5c606051d9f433_4.%20All%20For%20You.mp3

Frequently Asked Questions

No items found.

Get a Subscription