Accounting Quiz

What is the first step in the accounting cycle?

• Analyzing business transactions

• Preparing the trial balance

• Journalizing

• Posting

Which of the following is considered a current asset?

• Cash equivalents

• Land

• Building

• Accumulated depreciation

What does the trial balance prove?

• The accuracy of financial statements

• The cash flow of the business

• The equality of debits and credits

• The profitability of the business

Which document serves as evidence for analyzing business transactions?

• Source documents

• Trial balance

• General ledger

• Financial statements

What is the purpose of journalizing?

• To analyze business transactions

• To prepare financial statements

• To record transactions in chronological order

• To summarize transactions in the ledger

Which of the following is considered a current asset?

• Building

• Cash

• Land

• Equipment

What is the purpose of the income summary account?

• To summarize assets and liabilities

• To track owner withdrawals

• To close income and expenses at the end of the period

• To record cash transactions

Which of the following is NOT a step in the accounting cycle?

• Preparing a cash flow statement

• Recording adjusting entries

• Ruling the accounts

• Preparing a worksheet

What is the definition of 'revenue'?

• The owner's equity in the business

• The total expenses incurred

• The inflow of money or other assets

• The outflow of money or assets

What is the last step in the accounting cycle?

• Posting to the ledger

• Recording closing entries

• Preparing a post-closing trial balance

• Preparing the financial statements