#1
Which of the following is an example of a financial asset?
Inventory
Land
Stock
Machinery
#2
What does ROI stand for in finance?
Return on Investment
Rate of Inflation
Revenue of Income
Risk of Investment
#3
What is the primary purpose of a general ledger?
To record daily transactions
To prepare financial statements
To calculate taxes
To track employee salaries
#4
Which financial statement reports a company's revenues and expenses over a specific period of time?
Balance sheet
Income statement
Cash flow statement
Statement of retained earnings
#5
What is the purpose of a trial balance in accounting?
To calculate net income
To verify the accuracy of ledger account balances
To prepare financial statements
To record adjusting entries
#6
Which financial statement provides a snapshot of a company's financial position at a specific point in time?
Income statement
Cash flow statement
Balance sheet
Statement of retained earnings
#7
What is the formula to calculate working capital?
Current assets - Current liabilities
Total assets - Total liabilities
Net income / Total assets
Net income / Total liabilities
#8
What is depreciation in accounting?
An increase in the value of an asset
A decrease in the value of an asset over time
A form of taxation
An accounting error
#9
Which of the following is considered a long-term liability?
Accounts payable
Short-term loans
Accrued expenses
Bonds payable
#10
What does the term 'liquidity' refer to in finance?
The ability to convert assets into cash quickly without significant loss of value
The ability to borrow money at low interest rates
The measure of a company's long-term solvency
The ability to generate profits consistently
#11
Which accounting method records revenues and expenses as they are earned or incurred, regardless of when cash is received or paid?
Cash basis accounting
Accrual basis accounting
Double-entry accounting
Cost accounting
#12
In financial accounting, what does the term 'EBITDA' stand for?
Earnings Before Interest, Taxes, Depreciation, and Amortization
Estimated Business Investment Through Direct Assets
Equity-Based Investment in Tangible and Dividend Assets
Economic Balance in International Trade and Accounting
#13
What is the purpose of the statement of cash flows?
To show a company's cash inflows and outflows from operating, investing, and financing activities
To calculate a company's net income
To evaluate a company's long-term debt obligations
To summarize a company's shareholder equity
#14
What is the purpose of the general journal in accounting?
To record transactions in a chronological order
To prepare financial statements
To calculate taxes
To track employee salaries
#15
Which of the following is a financing activity in the statement of cash flows?
Purchasing inventory
Selling goods or services
Issuing bonds payable
Depreciation expense