Accounting Knowledge Check

What does QuickBooks Online’s invoicing model allow users to do?

• Manage payroll

• Track customer payments

• Create customized invoices

• Generate financial reports

Which accounting method records revenue and expenses when cash is received or paid?

• Hybrid Accounting

• Amortization Accounting

• Cash Accounting

• Accrual Accounting

Which financial statement is used to assess a company’s profitability?

• Income Statement

• Statement of Cash Flows

• Statement of Retained Earnings

• Balance Sheet

What is the purpose of a general ledger?

• To manage payroll

• To track customer payments

• To maintain all accounts in the accounting system

• To record daily transactions

Double entry bookkeeping: Explain the concept of debit and credit in double entry bookkeeping.

• Debit always represents an increase in assets

• Debit and credit are interchangeable terms in accounting

• Debit and credit are the two sides of the same coin, representing the dual aspect concept in accounting.

• Credit always represents a decrease in liabilities

__________ Records and manages all accounting related data associated with a company's customers.

• General Ledger Accounting

• Accounts Receivable Accounting

• Asset Accounting

• Accounts Payable Accounting

What is the fundamental accounting equation?

• Equity = Assets - Liabilities

• Liabilities = Assets + Equity

• Assets - Liabilities = Equity

• Assets = Liabilities + Equity

Which of the following represents money owed by a company to its suppliers?

• Inventory

• Accounts Payable

• Equipment

• Accounts Receivable

What does accrual accounting record?

• Depreciation and amortization expenses

• Depreciation and amortization expenses

• Cash transactions only

• Revenue and expenses when they are earned or incurred

What is the purpose of a chart of accounts?

• To categorize accounts by type

• To record daily transacctions

• To track customer payments

• To manage inventory