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LinkedIn Accounting Skill Assessment - Answers 2021

Updated: Sep 25, 2021

## Accounting Q1. Which statement is not an advantage of robotic process automation (RPA)? - [x] Bots are more creative than humans - [ ] Bots do no need to take time off - [ ] Bots improve efficiency - [ ] Bots can eliminate human errors Q2. What effect does a contra asset account have on a balance sheet? - [ ] A contra asset is not an accounting term - [x] A contra asset has a credit balance and therefore a negative effect on total assets - [ ] A contra asset with a positive balance will increase overall liabilities - [ ] A contra asset has a debit balance and therefore a positive effect on total assets Q3. Internal controls may be preventative, detective, corrective, or directive. Which is a detective control? - [ ] data backups - [x] physical inventory check - [ ] employee background checks - [ ] physical locks on inventory warehouse Q4. On March 15, a business receives an invoice from the power company for utilities used in February. The retailer pays the invoice on April 1. The business uses accrual-based accounting. Which month should the business recognize the expense? - [ ] April - [ ] March - [ ] no record required - [x] February Q5. Which choice is a general guideline for adequate separation of duties to prevent both fraud and error? - [ ] A person who has control over an asset should not safeguard that asset. - [ ] A person who has temporary or permanent custody of an asset should not account for that asset. - [x] A person who has record-keeping responsibility should not make journal entries. - [ ] A person who has operational responsibility should not authorize transactions for the area. Q6. What does the cost of a unit of product under absorption costing method consist of? - [ ] direct materials, direct and indirect labor, and fixed overhead - [ ] direct materials, indirect labor, and variable and fixed overhead - [x] direct materials, direct labor, and both variable and fixed overhead - [ ] direct materials, direct and indirect labor, and variable overhead Q7. Which answer best describes accruals and deferrals? - [ ] Accruals are past cash receipts and payments, while deferrals are expected future cash receipts and payments. - [ ] Both accruals and deferrals are both expected future cash receipts and payments. - [x] Accruals are expected future cash receipts and payments, while deferrals are past cash receipts and payments. - [ ] Both accruals and deferrals are not expected past cash receipts and payments. Q8. What do you call a situation where more than one person collaborates to circumvent existing internal controls? - [ ] assigned responsibility - [ ] segregation of duties - [ ] fraud prevention - [x] collusion Q9. Which is not an example of an internal control activity? - [ ] review of manufacturing plan - [ ] segregation of duties - [x] bank reconciliations - [ ] approval process Q10. Which budgeting approach request justification of all expenditures? - [x] zero-based budgeting - [ ] master budgeting - [ ] rolling budgets - [ ] bottom-up budgeting Q11. What does the discontinued operations section of the income statement refer to? - [x] disposal of a major product line or major geographical area of operations - [ ] sale of unused or obsolete equipment and discontinued inventory - [ ] a plant shutdown or decommissioning of a facility - [ ] net income or loss for products completed and sold Q12. How are the three financial statements (income, statement, balance sheet, and cash flow statement) linked? - [ ] Only the assets are reflected in the cash flow statement, and the net income expenses correlate with the liabilities. - [x] The net income goes to retained earnings, but the cash flow remains independent. - [ ] The gross profit goes to retained earning, and the shareholder equity total is added to the cash flow statement - [ ] The net income goes to the retained earning and to the cash flow statement Q13. Which is not one of the four perspectives of the balanced scorecard? - [ ] internal business - [ ] learning and growth - [x] quantitative - [ ] customer Q14. What would be deducted from the balance per books when doing a bank reconciliation? - [ ] deposits in transit - [ ] bank service fees - [x] outstating checks - [ ] electronic fund transfers/payments

Q15. What situation could be the results of the three retails store employees sharing the same cash register? - [ ] a thorough internal control activity - [x] a violation of assignment of responsibility - [ ] a violation of segregation of duties - [ ] a support process to avoid fraud Q16. A firm has $1,000 in debt and $3,000 in assets. What is the firm's debt-to-equity ratio? - [ ] 3 - [ ] 2 - [ ] 0.5 - [x] 0.33


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