Accounting
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This accounting trivia quiz has 247 free questions with answers and covers the profession from Mesopotamian clay tokens and Luca Pacioli's 1494 textbook to Sarbanes-Oxley: double-entry bookkeeping and the accounting equation, debits and credits, the four financial statements, depreciation, LIFO and FIFO, GAAP versus IFRS, the FASB and the IASB, the Big Four firms and how they got their names, the CPA exam and the first CPA licence, the IRS and Tax Day, and the scandals at Enron, WorldCom and Madoff that changed the rules. There are lighter questions too, on the abacus, VisiCalc, and the celebrities who trained as accountants first. It is built for accounting firms' team socials, business students, CPA candidates who want a break from the real thing, and anyone hosting a finance-themed round. Easy questions cover the vocabulary every bookkeeper knows; the hard ones ask which ledger came first and where the UK's tax year got its strange start date. Every answer has been checked against a reliable source and each question shows its citation once you have answered.
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Q 01Which Franciscan friar published the first printed description of double-entry bookkeeping in 1494?
Luca Pacioli
Luca Pacioli, a Franciscan friar, printed the first description of double-entry bookkeeping in his 1494 Summa de arithmetica, written in Italian so merchants could read it.
Q 02Which Renaissance artist drew the illustrations for the 1509 mathematics book Divina proportione?
Leonardo da Vinci
Leonardo da Vinci drew its geometric solids while living with the book's author, a friar who gave him mathematics lessons; the two fled Milan together when the French seized the city in 1499.
Q 03The oldest surviving complete double-entry books are the 1340 treasury accounts of which Italian port city?
Genoa
Genoa: its treasurers' accounts for 1340 set debits against credits and carry balances forward from the year before, which is why historians accept them as a full double-entry system.
Q 04Accounting records more than 7,000 years old have been found in which ancient region?
Mesopotamia
Mesopotamia: its temple storehouses listed goods received and traded, and one widely cited theory holds that this kind of counting and record-keeping is what grew into writing.
Q 05The word 'auditor' comes from the Latin audire, meaning what?
To hear
Audire means to hear: early audits were literally heard, with the accounts read aloud to the person checking them.
Q 06The words debit and credit come from the Latin debere and credere, meaning what?
To owe and to entrust
To owe and to entrust: in Latin a debitum was something owed and a creditum was a loan, a thing entrusted to someone else, which is why lending money is still called giving credit.
Q 07The fundamental accounting equation states that assets equal liabilities plus what?
Equity
Equity: assets equal liabilities plus owners' equity, and because every transaction is entered twice, once as a debit and once as a credit, the two sides stay equal however many entries are made.
Q 08Which financial statement is also known as the profit and loss account, or P&L?
The income statement
The income statement, or P&L, covers a whole period, not a single date, which is why its heading reads 'for the year ended' where a balance sheet names one day.
Q 09The cash flow statement is divided into operating, financing and which third category of activities?
Investing
Investing activities cover buying and selling long-term assets such as machinery; under US rules, the interest a company pays on its debt counts as an operating cash flow, not a financing one.
Q 10Which type of asset generally cannot be depreciated for tax purposes?
Bare land
Bare land: land does not wear out, become obsolete or get used up, so the tax rules allow no depreciation on it, although a building standing on it can be written off.
Q 11Which depreciation method charges the same amount in every year of an asset's life?
Straight-line
Straight-line is the most widely used depreciation method because it is the easiest to calculate: an asset's cost, less what it can be sold for at the end, is simply spread evenly across the years.
Q 12Which inventory costing method is allowed under US GAAP but explicitly prohibited under IFRS?
LIFO
LIFO: last-in, first-out lowers taxable profit when prices are rising, which is why many US companies took it up from the 1970s, while international standards ban it outright.
Q 13The body that sets US GAAP for public companies, the FASB, is based in which Connecticut city?
Norwalk
Q 21What is an auditor's opinion called when the financial statements are found fairly presented?
Unqualified opinion
Unqualified opinion: despite how it sounds, this is the best verdict a company can get, because it means the auditor has no reservations to add; accountants nickname it the clean opinion.
Q 22Enron traders were taped gloating about overcharging 'Grandma Millie' during which state's power crisis?
California
California: tapes released in 2004 caught Enron traders joking about 'Grandma Millie' as they gamed the state's 2000-01 electricity crisis with schemes nicknamed Death Star and Fat Boy.
Q 23Which Enron vice president warned Kenneth Lay in 2001 the company might 'implode in a wave of accounting scandals'?
Norwalk gave its name to the Norwalk Agreement of 2002, signed in the city, in which the FASB and its international counterpart pledged to make their two rulebooks compatible.
Q 14Which economy made IFRS mandatory for its listed companies from 2005?
The EU
The EU: a 2002 regulation made its listed companies draw up their group accounts under IFRS from 2005, so that results could be compared from one member state to the next.
Q 15The world's first professional body of accountants received its royal charter in 1854 in which country?
Scotland
Scotland: the royal charter granted to Edinburgh's Society of Accountants in 1854 is where the title 'chartered accountant' comes from, and its members were the first to use it.
Q 16The first law creating the Certified Public Accountant credential was passed in 1896 in which US state?
New York
New York passed the law in April 1896, letting the state's Regents award the new title to accountants who proved themselves either by examination or by their past experience.
Q 17Which branch of accounting takes its name from the Latin for 'of the forum'?
Forensic accounting
Forensic accounting: Roman trials were held in the public forum, so 'forensic' came to describe anything fit for a court of law, such as the financial evidence these accountants prepare.
Q 18William Welch Deloitte became the first independent auditor of which public company, in 1849?
The Great Western Railway
The Great Western Railway made Deloitte's name: he had opened his own London office only four years earlier, and the practice grew into the worldwide firm that still carries his name.
Q 19The letters in KPMG stand for Klynveld, Peat, Marwick and which fourth surname?
Goerdeler
Goerdeler: Reinhard Goerdeler, the German chairman who helped build the firm, had been imprisoned by the Nazis as a young man after his father Carl joined the 1944 plot against Hitler.
Q 20Which firm merged with Price Waterhouse in 1998?
Coopers & Lybrand
Coopers & Lybrand: its 1998 merger with Price Waterhouse created PricewaterhouseCoopers and turned the Big Six accounting firms into the Big Five.
Sherron Watkins
Sherron Watkins sent her warning anonymously the day after CEO Jeffrey Skilling's exit was announced, and it stayed inside Enron: the public first read the memo five months later.
Q 24WorldCom inflated its earnings by billions mainly through what accounting trick?
Capitalising line costs
Capitalising line costs: WorldCom booked routine network lease fees as capital assets; internal auditor Cynthia Cooper found the entries in June 2002, the overstatement topped $11 billion, and CEO Bernard Ebbers got 25 years.
Q 25The Sarbanes-Oxley Act of 2002 created which new body to oversee the auditors of public companies?
The PCAOB
The PCAOB put outside inspectors over the auditors of US public companies for the first time; until 2002 the profession had policed itself through its own trade body.
Q 26Which section of Sarbanes-Oxley requires management to report on internal controls over financial reporting?
404
404: this section is the part of the act whose costs are most argued over, because outside auditors must also report on the controls; Section 302 makes the CEO and CFO personally certify the accounts.
Q 27How many active accountants worked at the firm that audited Bernie Madoff's $65 billion fund?
1
1: David Friehling was the only active accountant at Friehling & Horowitz, a tiny firm in suburban Rockland County, and he later pleaded guilty to filing false audit reports for Madoff.
Q 28Al Capone was finally sent to prison in 1931 for what offence?
Income tax evasion
Income tax evasion earned Capone 11 years: the Supreme Court had ruled in 1927 that illegal income is still taxable, which gave prosecutors a charge they could prove against him.
Q 29The office of Commissioner of Internal Revenue was created in 1862 under which president?
Abraham Lincoln
Abraham Lincoln signed the Revenue Act of 1862, which created the office to collect the nation's first income tax, a temporary levy to help pay for the Civil War.
Q 30Before it moved to April 15 in 1955, the US income tax filing deadline fell in the middle of which month?
March
March: returns were due on March 15, the Ides of March, from 1918 until the deadline moved to April 15 in 1955, giving taxpayers an extra month to file.