FBLA Accounting Test

Which financial statement reports a company's financial performance over a specific accounting period?

• Balance Sheet

• Income Statement

• Cash Flow Statement

• Statement of Retained Earnings

What principle of accounting states that expenses should be matched with the revenues they help to generate?

• Going Concern Principle

• Conservatism Principle

• Matching Principle

• Materiality Principle

Which budgeting technique starts with the assumption that all department budgets are zero and must be justified for each new period?

• Incremental Budgeting

• Zero-Based Budgeting

• Activity-Based Budgeting

• Flexible Budgeting

In the United States, which form is commonly used for individual income tax returns?

• Form 1040

• Form 1099

• Form W-2

• Form W-4

What is the primary purpose of an audit?

• To prepare financial statements

• To ensure compliance with tax laws

• To verify the accuracy of financial records

• To analyze the company's market position

Which of the following is a direct cost in manufacturing?

• Factory rent

• Raw materials

• Company-wide advertising

• CEO salary

What accounting principle requires that companies disclose all relevant financial information in their financial statements?

• Full Disclosure Principle

• Historical Cost Principle

• Revenue Recognition Principle

• Objectivity Principle

Which financial statement shows the financial position of a company at a specific point in time?

• Income Statement

• Balance Sheet

• Cash Flow Statement

• Statement of Retained Earnings

What is the formula for calculating net income?

• Assets - Liabilities

• Revenues - Expenses

• Gross Profit - Operating Expenses

• Sales - Cost of Goods Sold

Which of the following is not a characteristic of a good budget?

• Flexibility

• Complexity

• Realism

• Clarity