#1
Which of the following is an example of an accounting transaction?
Buying office furniture on credit
Sending an email to a client
Organizing a team-building event for employees
Attending a conference
#2
Which financial statement reports a company's revenues and expenses over a period of time?
Balance Sheet
Income Statement
Statement of Cash Flows
Statement of Retained Earnings
#3
Which of the following is a current liability?
Accounts Receivable
Long-term Debt
Prepaid Expenses
Accounts Payable
#4
Which financial statement shows a company's financial position at a specific point in time?
Income Statement
Statement of Cash Flows
Balance Sheet
Statement of Retained Earnings
#5
Which of the following is not considered an asset?
Accounts Receivable
Inventory
Accounts Payable
Land
#6
Which of the following is an example of a long-term liability?
Accounts Payable
Notes Payable due in 6 months
Prepaid Expenses
Salaries Payable
#7
Which financial statement reports changes in retained earnings over a period?
Income Statement
Balance Sheet
Statement of Retained Earnings
Statement of Cash Flows
#8
What is the accounting equation?
Assets = Liabilities + Owner's Equity
Revenue - Expenses = Net Income
Assets + Expenses = Liabilities
Owner's Equity - Liabilities = Assets
#9
What is the purpose of double-entry accounting?
To record transactions only once
To prevent errors in recording transactions
To maintain secrecy of financial information
To reduce taxes owed by the company
#10
What is the purpose of the trial balance in accounting?
To determine the accuracy of recorded transactions
To calculate the company's taxes
To prepare financial statements
To assess the company's market value
#11
What does the term 'depreciation' refer to in accounting?
Increase in the value of an asset over time
Allocating the cost of an asset over its useful life
Decrease in the value of an asset over time
Exchanging an asset for cash
#12
What is the purpose of the statement of cash flows?
To report changes in the company's equity
To disclose significant accounting policies
To provide information about the company's liquidity and solvency
To show how cash is generated and used during a specific period
#13
What is the accounting equation also known as?
Financial equation
Fundamental equation
Balance equation
Basic equation
#14
What is the primary purpose of financial statements?
To provide information about the company's competitors
To report management's discussion and analysis
To communicate the financial position of a company to stakeholders
To determine the company's dividend policy
#15
Which of the following is a contra account?
Accounts Payable
Accumulated Depreciation
Inventory
Prepaid Expenses
#16
Which of the following is a contra asset account?
Accumulated Depreciation
Accounts Payable
Common Stock
Retained Earnings