Practice for Competency Exams, Exams of Accounting

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Competency Exam — Practice The competency exam consists of 15 multiple choice questions and one comprehensive Accounting Cycle Process problem. This competency exam practice document breaks the multiple choice questions and the Accounting Cycle Practice problem into two sections: MULTIPLE CHOICE QUESTIONS In order to prepare for the multiple choice questions on the competency exam, you should be prepared to answer questions based on the following topics: Understand the fundamental A = L + E equation. What are assets? What are liabilities? Understand the concept of contra-accounts. Understand the normal balances of accounts. Who uses financial information? What does financial information capture and report? When do companies have to report financial information? When is their year end? Understand the matching principle. Understand the revenue principle. Understand how to record a liability. Understand how to record an asset. Understand cash dividends. Understand which accounts are affected by an adjusting journal entry. Understand why adjusting journal entries are made. What is net income? Be able to calculate and record Interest Expense or Interest Revenue Be able to calculate and record depreciation expense using straight line depreciation Be able to record a simple common stock and APIC transaction Be able to record a cash dividend transaction What are the different trial balances and when are they used? Understand the closing process.