Introduction to Financial Accounting

What is bookkeeping?

• The process of maintaining and recording all financial transactions.

• A method of auditing financial statements.

• A type of financial analysis.

• The preparation of tax returns.

What does accounting help businesses to maintain?

• Timely and accurate records of their finances.

• A record of all employee salaries.

• An inventory of all assets.

• A list of all transactions.

What is the primary purpose of financial statements?

• To provide a summary of a company's financial performance.

• To list all employees and their roles.

• To track inventory levels.

• To outline company policies.

Which of the following is a key component of a balance sheet?

• Assets, liabilities, and equity.

• Revenue, expenses, and profit.

• Cash flow, investments, and dividends.

• Sales, marketing, and operations.

What is the accounting equation?

• Assets = Liabilities + Equity

• Revenue = Expenses + Profit

• Cash = Sales - Expenses

• Assets + Liabilities = Equity

Which financial statement shows a company's revenues and expenses over a specific period?

• Income statement

• Balance sheet

• Cash flow statement

• Statement of changes in equity