LinkedIn Accounting Skill Assessment Answers

If You are searching for a list of all questions and answers for the LinkedIn Accounting Skill Assessment, this is the right place for You.

The accounting skill assessment is designed to help you identify your strengths and weaknesses in accounting. It covers a range of topics, from basic accounting concepts to more advanced topics such as financial statement analysis.

This can be a great tool for career development. It can help you identify areas where you need to improve, and it can also help you to prepare for certification exams or job interviews.

Table of Contents

Q1. Which statement is not an advantage of robotic process automation (RPA)?

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
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
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
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.
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
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.
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
collusion

Q9. Which is not an example of an internal control activity?

review of manufacturing plan
segregation of duties
bank reconciliations
approval process

Q10. Which budgeting approach request justification of all expenditures?

zero-based budgeting
master budgeting
rolling budgets
bottom-up budgeting

Q11. What does the discontinued operations section of the income statement refer to?

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.
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
quantitative
customer

Q14. What would be deducted from the balance per books when doing a bank reconciliation?

deposits in transit
bank service fees
outstating checks
electronic fund transfers/payments

a thorough internal control activity
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
0.33

Q17. An external auditor is required to be independent when performing

all attestation services
all professional services
all tax services
all consulting engagements

Q18. Proper segregation of functional responsibilities calls for separation of

custody, payment, and recording
authorization, custody, and execution
authorization, custody, and recording
custody, execution, and payment

Q19. What does the degree of operating leverage represent?

how much the value of capital assets will change in response to a change in sales
how much the operating income of a company will change in response to a change in sales
the valuation of assets to determine how much additional debt the company can borrow
how much the sales of a company will change in response to a change in operating income

Q20. Which characteristic would concern an auditor about the risk of material misstatements arising from fraudulent financial reporting?

limited employee turnover within the accounting and finance department
management’s disregard of regulations and regulatory authorities
regularly reported bank reconciliations, including deposits in transit
capital assets sold at a loss before being depreciated fully

Q21. An employee who makes a sale, ships the goods, and bills the customer violates which control activity?

assignment of responsibility
audit verification
segregation of duties
review and reconciliation

Q22. What trait distinguishes auditors from accountants?

The auditor can interpret accounting principles applicable to the country in which the client operates.
The auditor has extensive education beyond what is required for an accountant
The auditor can adapt to a rapidly changing profession.
The auditor has expertise in the gathering and interpretation of audit evidence.

Q23. What is the purpose of an operational audit?

assessing the company’s compliance with environmental laws and regulations
evaluating whether the organization is meeting the metrics set by management in order to achieve the goals and objectives set forth by the board of directors
assessing the organization’s control mechanisms for overall efficiency and reliability
evaluating compliance with applicable laws, regulations, policies, and procedures

Q24. Which statement is false?

The balanced scorecard aligns an organization’s operational activities with its mission.
The balanced scorecard focuses on these four primary areas: financial, customer, internal process, and learning and growth.
The balanced scorecard measures, tracks, and reports on a balance of qualitative and financial data and metrics.
The balanced scorecard ensures the organization’s profitability aligns with director compensation and dividend expectations.

Q25. Which choice is not a component of internal control?

information and communication
risk mitigation
monitoring
control environment

Q26. What is the difference between the cost of an asset and the accumulated depreciation for that asset?

depreciation value
prepaid asset
depreciation expense
book value

Q27. A company budgeted 1,200 washers, but only 1,000 are produced. It costs $10 to produce a widget. What is the materials variance?

200
2000
350
20

Q29. Who does an audit committee report to?

external auditors
senior management
board of directors
union of employee representatives

Q30. A business purchased office equipment by issuing aone-year note payable. The entire amount of the note is due at the end of one year. How do you record this transaction?

Debt asset, credit equity
Debt liablity, credit asset.
Debit asset, credit liability
Debit equity, credit asset.

Q31. Which section of a financial annual report describes the corporation’s accounting methods?

Notes to the financial statements
An auditor’s report
Listing of the stockholders
Management discussion and analysis

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