Accounting Quiz

What is the Accounting Equation ?

• Assets = Liabilities + Owner's Equity

• Assets + Liabilities = Shareholders' Equity

• Assets = Liabilities - Shareholders' Equity

• Assets + Shareholders' Equity = Liabilities

Which accounting method recognizes revenues and expenses when cash actually changes hands?

• Accrual Accounting Method

• Cash Accounting Method

• Cost Accounting

• Double-entry Accounting System

What does GAAP stand for?

• General Accounting and Auditing Principles

• Generally Accepted Accounting Principles

• General Accepted Auditing Policies

• Governmental Accounting and Auditing Principles

What is the purpose of a Balance Sheet?

• To record the revenues and expenses of a company

• To show all assets, liabilities, and owners' equity at a moment in time

• To determine the costs associated with producing a product or service

• To manage the assets, liabilities, equity, and cash flow of an organization

What does the General Ledger (GL) store?

• Only the organization's financial transactions

• Only the organization's financial data

• The organization's main accounting record that stores transactions and financial data

• The organization's policies and accounting rules

What is a Liability in financial terms?

• A company's assets minus its liabilities.

• A visual representation of a general ledger account.

• A debt or obligation owed by a person or organization.

• A financial statement that reports revenues and expenses.

What does Managerial Accounting involve?

• Reporting revenues, expenses, and income for a time period in the past.

• Analyzing and communicating financial information to internal users for decision-making.

• Showing changes in income and balance sheet accounts.

• A company's assets minus its liabilities.

What is Net Income also referred to as?

• Owner's Equity

• T-Account

• Net Profit

• Statement of Cash Flows

Owner's Equity is best described as:

• A debt or obligation owed by a person or organization.

• A company's assets minus its liabilities.

• A visual representation of a general ledger account.

• A financial statement that shows changes in income and balance sheet accounts.

What does a Profit and Loss (P&L) Statement report?

• Changes in cash entering and leaving the company.

• A company's assets minus its liabilities.

• Revenues, expenses, and income (or loss) for a time period in the past.

• A visual representation of a general ledger account.