Course Outline
Join PRO

Accounting Principles(Quick Test #1)

Harold Averkamp, CPA, MBA

After you have answered all 20 questions, click "Grade This Quick Test" at the bottom of the page to view your grade and receive feedback on your answers.

Note: Some of the following test questions may not have been covered in the Explanation or Practice Quiz for this topic. For more insight regarding a specific question, use the search box at the top of the page.

    1. 1. This non-government organization currently establishes accounting standards in the United States.

    2. 2. Costs that are used up in the process of earning revenues are referred to as __________.

    3. 3. Advertising costs and research and development costs are usually __________.

    4. 4. What is the accounting term for increases in equity resulting from transactions that are not part of a company’s main operations?

    5. 5. The matching principle is best achieved when a company’s vacation expense and liability are reported in the period when the employees __________ the vacation days.

    6. Select the accounting principle or term that best matches the descriptions listed as items 6 - 16:
      Each principle or term can be used several times.

      economic entity
      full disclosure
      going concern
      industry practices
      monetary unit
      time period

    7. 6. In the U.S., assets are reported in U.S. dollars and the dollar’s purchasing power is assumed to be constant or stable over time.

    8. 7. Allows accountants to round financial statement amounts to the nearest thousand dollars.

    9. 8. Results in dozens of pages of notes to the financial statements.

    10. 9. Allows accountants to report a proprietor’s business assets separately from the proprietor’s personal assets.

    11. 10. When doubt exists between two alternatives, the accountant should select the one with the lesser asset amount or the one resulting in less profit.

    12. 11. Allows an ongoing business to prepare quarterly financial statements.

    13. 12. Requires accrual accounting and adjusting entries.

    14. 13. Defined as the cash or cash equivalent amount at the time an asset was purchased.

    15. 14. Allows inexpensive equipment to be expensed immediately instead of being depreciated.

    16. 15. Justifies stating assets at cost and the deferral of some costs to a future accounting period.

    17. 16. Assumption that the company will continue in business long enough to carry out its objectives and commitments.

    18. Match one of the following qualitative characteristics to items 17 - 20:
      Each term may be used more than once. (These items are based on the FASB's Statement of Financial Accounting Concepts No. 2, Qualitative Characteristics of Accounting Information, which is available at


    19. 17. Objective, unbiased, verifiable.

    20. 18. Is enhanced through common accounting rules.

    21. 19. A reader of the financial statements can assume that the same accounting rules are being followed year after year unless noted.

    22. 20. Using the same principles at different automobile manufacturers.

Any questions left unanswered will be marked incorrect.

Save or Print Our Materials by Visiting the Downloads Page


About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on

Learn More About Harold
Course Outline
Take the Tour Join Pro Upgrade to Pro Plus