Practice Quiz

Which of the following is not a core financial statement?

• 1. The Income Statement

• 1. Statement of Cash Flows

• 1. The Trial Balance

• 1. The Balance Sheet

Which of the following account types increase by debits in double-entry accounting?

• 1. Assets, Expenses, Losses

• 1. Assets, Revenue, Gains

• 1. Expenses, Liabilities, Losses

• 1. Gains, Expenses, Liabilities

Which of the following is true?

• 1. Accounts receivable are found in the current asset section of a balance sheet.

• Accounts receivable increase by credits

• 1. Accounts receivable are generated when a customer makes payments.

• 1. Accounts receivable become more valuable over time.

How are a company’s financial statements used?

• 1. For internal analysis

• 1. For external negotiation

• 1. For compliance

• 1. All of the above

Which of the following scenarios increases accounts payable?

• 1. A customer fails to pay an invoice.

• 1. A supplier delivers raw materials on credit.

• 1. Office supplies are purchased with cash.

• 1. None of the above

Which accounts are associated with cost of goods sold?

• 1. Accrued interest

• 1. Depreciation

• 1. Dividends

• 1. Inventory

What is the most-used method to amortize intangible assets on a company’s financial statements?

• 1. Straight-line method

• 1. Sum of the years’ digits method

• 1. Double-declining balance method

• 1. Units of production method

Unearned revenues are recorded on a company’s balance sheet under which kind of account?

• 1. Current asset

• 1. Owners’ or stockholders’ equity

• 1. Non-current asset

• 1. Liability

The listing of all the financial accounts within a company’s general ledger is called the _____.

• 1. Chart of accounts

• 1. Journal entry

• 1. Balance sheet

• 1. P&L statement

In a journal entry, a debit decreases which of the following accounts?

• 1. Cash

• 1. Accounts Payable

• 1. Supplies Expense

• 1. Both a and c