#1
Which of the following is an example of a financial transaction?
Buying groceries with cash
ExplanationPurchase involving monetary exchange.
#2
What is the purpose of a bank account?
To save money
ExplanationFacilitates saving and transactions.
#3
Which of the following is NOT a type of bank account?
Loan account
ExplanationLoan accounts are not bank deposit accounts.
#4
What is the purpose of a balance sheet?
To assess the financial health of a business
ExplanationSummarizes assets, liabilities, and equity.
#5
What is the difference between debit and credit?
Debit means decreasing assets, while credit means increasing assets
ExplanationDebit and credit affect asset balances differently.
#6
Which financial statement shows the revenues and expenses of a company?
Income statement
ExplanationDetails revenue, expenses, and net income.
#7
What is the purpose of a cash flow statement?
To track the movement of cash in and out of a business
ExplanationSummarizes cash inflows and outflows.
#8
Which of the following is an example of an operating expense?
Paying employee salaries
ExplanationCosts related to normal business operations.
#9
What is the role of a credit card?
To make purchases with borrowed money
ExplanationFacilitates purchases with credit.
#10
What is the purpose of reconciling a bank statement?
To match the transactions in the bank statement with the transactions in the company's records
ExplanationEnsures accuracy between bank and company records.
#11
Which of the following is a characteristic of a good budget?
It is flexible and can be easily changed
ExplanationAllows adjustment to changing circumstances.
#12
What is the purpose of a financial audit?
To verify the accuracy of financial statements
ExplanationEnsures financial statement reliability.
#13
What is the purpose of the Securities and Exchange Commission (SEC)?
To regulate the stock market
ExplanationEnsures fair and transparent markets.
#14
Which of the following is an example of a non-cash transaction?
Depreciation of equipment
ExplanationNo immediate cash exchange involved.