Accounting Quiz

What is the owner's interest in the assets of the business after liabilities are deducted?

• Revenue

• Expenses

• Equity

• Assets

Which term is associated with the income from business operations?

• Expenses

• Revenue

• Liabilities

• Equity

What is the definition of equity in accounting terms?

• Income from operations

• Owner's claim of the business

• Debts to be paid

• Resources owned

What does a debit entry represent in accounting?

• Increase in liabilities

• Decrease in assets

• Increase in assets

• Decrease in equity

What does cash flow represent?

• Total revenue

• Net profit

• Net amount of cash transferred

• Total expenses

What type of financial statement is a balance sheet?

• Shows cash flow over time

• Shows assets, liabilities, and equity at a specific point

• Shows revenue and expenses over time

• Shows profit and loss

What is the role of a ledger in accounting?

• To record cash flow

• To record all financial transactions

• To record revenue and expenses

• To record assets and liabilities

Which accounting method records revenue and expenses when they are earned or incurred, not when cash is exchanged?

• Depreciation

• Inventory

• Accrual

• Accounts Payable

Which term refers to a book or other collection of financial accounts?

• Inventory

• Ledger

• Trial Balance

• Accrual

What are "Dividends" in the context of a company?

• An estimate of income and expenditure for a set period of time

• Revenue minus the cost of goods sold

• A portion of a company's earnings distributed to shareholders

• The actual profit after working expenses have been paid