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Financial Accounting Concepts and Business Organizations Quiz

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

Income Statement

Explanation

Shows company's financial performance.

Which financial statement reports a company's assets, liabilities, and shareholders' equity at a specific point in time?

Balance Sheet

Explanation

Snapshot of financial position.

Which of the following is a basic accounting equation?

Assets = Liabilities + Equity

Explanation

Fundamental balance concept.

Which financial statement shows the changes in retained earnings over a specific period?

Statement of Retained Earnings

Explanation

Details retained profits.

Which of the following is an example of an intangible asset?

Goodwill

Explanation

Non-physical asset value.

Which of the following is not a characteristic of a sole proprietorship?

Limited liability

Explanation

Sole proprietors are fully liable.

Which accounting principle requires that expenses are recorded when they are incurred, regardless of when the payment is made?

Matching principle

Explanation

Expenses matched to revenue.

Under which business entity is ownership represented by shares of stock, with limited liability for shareholders?

Corporation

Explanation

Shareholders have limited liability.

Which of the following is not a component of shareholders' equity?

Dividends

Explanation

Distributed profits.

#10

Which accounting principle requires that assets and liabilities are initially recorded at their acquisition cost?

Cost principle

Explanation

Recorded at purchase price.

Financial Accounting Concepts and Business Organizations Quiz

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

Which financial statement reports a company's assets, liabilities, and shareholders' equity at a specific point in time?

Which of the following is a basic accounting equation?

Which financial statement shows the changes in retained earnings over a specific period?

Which of the following is an example of an intangible asset?

Which of the following is not a characteristic of a sole proprietorship?

Which accounting principle requires that expenses are recorded when they are incurred, regardless of when the payment is made?

Under which business entity is ownership represented by shares of stock, with limited liability for shareholders?

Which of the following is not a component of shareholders' equity?

Which accounting principle requires that assets and liabilities are initially recorded at their acquisition cost?

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