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The NACPB-ACCOUNTING exam has 50 questions and runs 2 hours.
These 10 free NACPB-ACCOUNTING questions are organized by exam domain, so you can see how each part of the Accounting Certification blueprint is tested. Reveal the answer and explanation under each question.
The owner of an accrual-basis consulting firm plans to wait until January to record a project completed and accepted on December 29. The fee is fixed, the right to payment is unconditional, and collection is expected. The invoice will be sent January 3. What belongs in the December 31 financial statements?
Correct answer: C - Report the fee as a receivable and earned revenue.
An aging analysis supports a $7,600 ending allowance for credit losses. Before the year-end adjustment, the allowance account has a $900 debit balance, which already reflects $3,000 of write-offs recorded during the year. How much credit loss expense is needed in the year-end adjusting entry?
Correct answer: C - $8,500
The credit manager approves a customer's balance for write-off under the allowance method. An adequate allowance is already recorded, and the loss estimate for the remaining receivables needs no revision. A sales manager objects that posting the write-off will reduce both this month's profit and net accounts receivable. What is the actual effect of the write-off entry?
Correct answer: A - Neither profit nor net accounts receivable changes.
At December 31, a wholesaler is reviewing three inventory lots: a purchase shipped by its supplier FOB shipping point and still in transit; a shipment to its customer FOB destination that has not yet arrived; and another company's unsold goods held in the wholesaler's warehouse on consignment. Applying the stated ownership terms, which lots should the wholesaler include?
Correct answer: D - Include both shipments in transit; exclude the goods held on consignment.
A hardware wholesaler uses a periodic inventory system and FIFO. It starts the month with 80 valves at $15 each, buys 120 at $18, and later buys 100 at $21. After sales of 220 valves, the physical count shows 80 on hand. There are no returns or inventory losses. At what cost should the 80 valves be reported?
Correct answer: C - $1,680
A machine has been used for four years. On January 1, its recorded cost is $96,000 and accumulated depreciation is $36,000; all prior depreciation was recorded correctly. An engineering review now estimates four additional years of use and a $4,000 residual value. The machine remains in service throughout the year. Under straight-line depreciation, what expense should be recognized for this year?
Correct answer: B - $14,000
A final liquidation payment batch is minutes from release. It would distribute all cash equally to two partners, but a valid supplier payable remains unpaid. The partners share profits equally but have unequal credit capital balances. All assets have been sold and all gains and losses allocated. There are no partner loans, capital deficiencies, or further liquidation costs. What revision is required before release?
Correct answer: D - Pay the supplier first, then distribute the remaining cash according to the final capital balances.
A corporation reissues treasury shares for more than their repurchase cost. It uses the cost method, and the shares were never retired. A draft entry credits the excess proceeds to Gain on Sale of Investments. Which account should receive that credit instead?
Correct answer: B - Additional Paid-in Capital - Treasury Stock
Two distributors have current ratios of 2.2. Marlin's quick ratio is 0.7, while Sable's is 1.6. Their only current assets are cash, net trade receivables, inventory, and prepaid expenses. Both use the same ratio definitions. Which conclusion is supported by this comparison?
Correct answer: A - A larger share of Marlin's current assets is inventory and prepaid expenses.
A manufacturer makes a cash down payment for equipment and signs a note directly to the seller for the balance. Its draft statement of cash flows reports the entire purchase price as an investing outflow and the note amount as a financing inflow. What correction is needed under U.S. GAAP?
Correct answer: A - Report the cash down payment as investing; disclose the note-financed balance separately.
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