Accounting Practice Quiz

• $4,000

• $16,000

• $10,000

• $6,000

What is accounting?

• The process of keeping track of your money

• The process of keeping books for a company

• The process of planning, recording, analyzing, and interpreting financial information

• The Process of keeping track of spending vs saving of a business

What is the accounting equation?

• Assets + Owner's Equity = Liabilities

• Assets+Liabilities = Owner's Equity

• Assets = Liabilities + Owner's Equity

• Liabilities - Assets = Owner's Equity

ABC company has 100,000 in assets and 75,000 in liabilities. What does ABC Company's owner's have in Equity?

• 100,000

• 75,000

• 25,000

• (25,000)

Johnny does the accounting books for ABC company. Johnny realized that his math was not adding up and some money was missing. What should Johnny do?

• Forget about it, it will all come out in the wash.

• Redo his math, maybe he made a mistake.

• Tell Someone, maybe there is someone stealing

• Redo his math and then if he is correct, go and tell someone.

Which financial statement reports a company's financial performance over a specific accounting period?

• Balance Sheet

• Income Statement

• Cash Flow Statement

• Statement of Retained Earnings

Which financial statement shows the financial position of a company at a specific point in time?

• Income Statement

• Balance Sheet

• Cash Flow Statement

• Statement of Retained Earnings

What is the formula for calculating net income?

• Assets - Liabilities

• Revenues - Expenses

• Gross Profit - Expenses

• Sales - Cost of Goods Sold

A company has a total revenue of 500,000 and the cost of goods sold is 300,000.

Calculate the Gross Profit.

• $200,000

• $100,000

• $800,000

• $700,000

revenue (income statement) account which represents the sold inventory cost during a period

• Inventory

• Cost of Goods Sold

• FIFO

• LIFO