Understanding Accounting Principles and Practices
Accounting Principles and Practices
Assets and Liabilities
(406) Containers and packaging returnable to suppliers belong to: Assets
(407) Advances to suppliers belong to: Assets
(438) Advances to customers belong to: Assets
Group 4 accounts belong to: Current assets and current liabilities
Insurance Policy Accounting
An insurance company invoiced a customer for an annual insurance policy in November, collecting it. The closing date is December 31st every year. For that reason, at the end of the accounting cycle, the customer must make an adjustment using the following account/s: 485 account
Receivables and Book Value
A right coming from an income from renting a warehouse earned but not collected is recorded in account: (440) Receivables
Book value of a tangible asset is: Initial value – the correction amounts (accumulated depreciation, accumulated amortization, accumulated impairment)
Depreciation Calculation
Company T has a machine valued at 50,000 euros and a residual value of 5,000 euros; its useful life is 10 years. Its annual depreciation is:
(50,000 – 5,000) / 10 = 4,500 (Cost – Estimated residual value) / Useful life
Discounts and Sales
Discounts and similar reductions for paying in advance granted by the company to its customers and not included in the invoice are recorded in the account: We must consider subgroup 70 (706)
Returns in merchandise sold give rise to: (541) Current debt securities
When selling merchandise on account we can use: 430 and 433 are correct
Property, Plant, and Equipment (PP&E)
Which of the following accounts, belonging to the Property, Plant, and Equipment (subgroup 21), will not be amortized?: 210
Which of the following accounts does not belong to Property, Plant, and Equipment? (subgroup 21 only)
Financial Investments and Expenses
Long-term Financial Investments include: Group 1 or 2 (Assets)
Once taken to the bank to discount some promissory notes from customers, the internet expense account belongs to subgroups: 66 Finance Expense
One of the following accounts is not related to transactions in foreign currency. Point it out: (669)
When investing in short-term debt securities, we use the following account: (541) Current debt securities
When issuing short-term debt securities, we use the following account: (500) Current bonds and obligations
When investing in long-term debt securities, we use the following account: (251) Non-current debt securities
When investing in long-term debt securities, we use the following account: Group 1 or 2 (Bonds) (177)
Equity and Share Capital
Own equity instruments are recorded in account: (100) Share Capital
Chart of Accounts
Point out the best option for group 1 in the chart of accounts: All the above are correct
Group 2, Non-current Assets, comprises tangible assets and intangible assets
Merchandise Returns and VAT
Returns of merchandise purchased give rise to: Debit in (477) Output VAT
Trade Receivables
The amounts due to be received from customers are shown in the account: (430) Trade receivables
When a right coming from sales offers some difficulties to be collected, we must use: (436) Doubtful trade receivables
Accrual Principle
The accrual principle means: Economic events will be recorded when they occur
Depreciation Methods
The usage-based depreciation method: The resulting annual depreciation expense depends on the degree of use of the asset
Trade Bills
The relationship between the account (4312) and (4315) is that: The (4312) account is for Trade Bills in Debt Collection Management, whereas the (4315) account is for Past due trade bills. The main difference is that the (4315) is doubtful that you will receive the amount owed.
Which account represents bills of exchange from customers taken to the bank to the discount? (4311)
Which account represents bills of exchange from secondary activities taken to the bank to the discount? 759 account
Which account represents Bills of Exchange from customers taken to the bank for collection management? 4312 account
When we take a note receivable to the bank to the discount: The account (5208) increases
Transportation Expenses
Transportation expenses related to purchases will be recorded in the account: (624) Transport
Transportation expenses related to sales will be recorded in the accounted: (624) Transport
Impairment and Losses
When a negative difference between book value and market value of an old machine, we use the account: (691) Impairment losses on property, plant, and equipment
When a loss after selling an old machine, we use the account: (671) Losses on property, plant, and equipment
Employee Debts
Which of the following accounts represent debts with employees? (465) Salaries payable
Financial Liabilities
Which of the following options is not a financial liability? Advances to personnel
Impairment Concept
Which of the following sentences suits the concept of impairment? Both are correct
General Knowledge
Which of the following ideas are correct? All of the above are correct