Financial Accounting Quiz

Which financial statement reports the revenues and expenses for a period of time such as a year or a month?

• The retained earnings statement

• The balance sheet

• The income statement

• The statement of cash flows

Under the accrual basis of accounting, revenues are reported in the accounting period, when which of the following occurs?

• When the cash is received

• When the services or goods have been delivered

• When the invoice is sent

• When the payment is made

Revenues minus expenses equals:

• Net income

• Gross margin

• Gross profit

• Operating income

Liabilities often have in their account title, the word:

• Receivable

• Payable

• Due to

• Losses

Accounting entries involve a minimum of how many accounts?

• Four

• Two

• Three

• One

Assets minus liabilities equals:

• Net profit

• Total revenue

• Stockholders equity or owner's equity

• Bottom line

Which term is associated with 'left' or 'left side'?

• Expense

• Income

• Credit

• Debit

When a company pays a bill, the account cash will be:

• Debited

• Increased

• Credited

• Decreased

What will usually cause an asset account to increase?

• A debit

• A credit

• A loan

• A withdrawal

Entries to expenses such as rent expense are usually:

• Withdrawals

• Deposits

• Credits

• Debits