Easy Financial Accounting Practice Questions

160 free easy-difficulty Financial Accounting questions, drawn live from KomFi's calibrated bank. Build the foundation first: these test the core mechanics every harder question assumes.

1. Which of the following describes the immediate impact on the accounting equation?
2. What is the necessary adjusting journal entry?
3. Which of the following accounts is a temporary (nominal) account that must be closed to zero at the end of the
4. What is the balance in the Prepaid Insurance account on the December 31 Balance Sheet?
5. Under ASC 842, a lessee classifies a lease as 'Operating'. How is the periodic lease expense typically recogni
6. A company holds an investment in bonds classified as 'Availa… — Where is this gain reported under ASC 320?
7. Which of the following correctly identifies all the items classified as current assets on a classified balance
8. Under the accrual basis of accounting, when should Aurora Logistics recognize the $40,000 in revenue?
9. Westwood Manufacturing takes an unrealized loss of $50,000 o… — Where is this loss reported under US GAAP?
10. A firm has $50,000 of available-for-sale (AFS) debt securiti… — How is this $2,000 gain reported?
11. What is the impact on the Balance Sheet on the declaration date (November 1)?
12. Under ASC 606, how should the remaining $7,000,000 be reported on the Year 1 Balance Sheet?
13. A company holds debt securities classified as 'Available-for… — Ignoring taxes, how is this $5,000 increase re
14. What is the required adjusting entry on December 31 to comply with the matching principle?
15. What is the immediate impact on the accounting equation?
16. According to ASC 842, a company enters into a 5-year operati… — How does this impact the Balance Sheet at comm
17. Under U.S. GAAP, if a lawyer performs $5,000 of legal services in December, bills the client in January, and r
18. What is the total value of Assets on the balance sheet immediately following these two transactions?
19. A multinational firm has a foreign subsidiary with a functio… — Where is this translation adjustment reported?
20. Under the matching principle, when is the20,000 bad debt expense recognized?
21. If it negotiates better terms with suppliers, increasing DPO to 30 days while others remain constant, what is
22. Why does the LIFO method typically lead to lower income taxes in an inflationary environment?
23. Under US GAAP, the 'Matching Principle' (Expense Recognition) primarily requires that:
24. What is the primary reason that adjusting entries are necessary in an accrual system?
25. Under the accrual basis, if a firm incurs a $3,000 utility bill in December but does not pay it until January
26. Which of the following is a 'Permanent Account' that is NOT closed at the end of the period?
27. What is the result of the following adjusting entry? Debit: Accounts Receivable $1,200; Credit: Service Revenu
28. Which of these is a key difference between the 'Cash Basis' and the 'Accrual Basis' regarding expenses?
29. Under the rules of double-entry bookkeeping, what is the normal balance of an Asset account?
30. What is the primary purpose of a Trial Balance?

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