Understanding Accounting Terms

1. Which of the following is an example of an Asset? a) Cash b) Owner's equity c) Sales

• a) Cash

• Revenue

• Inventory

• Accounts payable

2. What does CRJ stand for? a) Cash Receipts Journal b) Capital Record Journal c) Credit Return Journal

• Credit Receipt Journal

• a) Cash Receipts Journal

• Cash Record Journal

• Capital Returns Journal

3. What does CPJ stand for? a) Cash Payments Journal b) Capital Purchase Journal c) Credit Purchase Journal

• Cash Purchase Journal

• a) Cash Payments Journal

• Credit Payments Journal

• Capital Payments Journal

4. What is recorded in the CRJ? a) All payments made by the business b) All cash received by the business c) All expenses incurred by the business

• d) All assets owned by the business

• a) All payments made by the business

• c) All expenses incurred by the business

• b) All cash received by the business

5. What is recorded in the CPJ? a) All payments made by the business b) All cash received by the business c) All revenues generated by the business

• All expenses incurred by the business

• All loans taken by the business

• All assets purchased by the business

• a) All payments made by the business

6. What type of account is Capital? a) Asset b) Liability c) Owner's Equity

• d) Revenue

• e) Expense

• f) Investment

• c) Owner's Equity

7. Complete the equation: O = A - ? a) L b) C c) E

• T

• E

• M

• R

8. What are the three elements of the Accounting Equation? a) Assets, Liabilities, Equity b) Revenue, Expenses, Profits c) Income, Expenses, Profit

• a) Assets, Liabilities, Equity

• Assets, Profits, Losses

• Assets, Revenue, Expenses

• Liabilities, Equity, Cash

9. What is a source document? a) A document that records all purchases made by a business b) A document that provides evidence of a transaction c) A document that summarizes financial performance

• a document that outlines company policies

• a document that tracks inventory levels

• b) A document that provides evidence of a transaction

• a document that lists employee salaries

10. Which of the following is a liability? a) Accounts Payable b) Cash c) Inventory

• c) Inventory

• b) Cash

• a) Accounts Payable

• d) Accounts Receivable