#1
Which of the following is a financial asset?
Inventory
Accounts Payable
Stock
Land
#2
What is the basic accounting equation?
Assets = Liabilities + Equity
Assets - Liabilities = Equity
Liabilities = Assets - Equity
Equity = Assets + Liabilities
#3
What is the accounting equation also known as?
Balance Sheet Equation
Equity Equation
Debt Equation
Revenue Equation
#4
Which financial statement shows the financial position of a company at a specific point in time?
Income Statement
Statement of Cash Flows
Balance Sheet
Statement of Retained Earnings
#5
What is the purpose of the journal entry in accounting?
To summarize transactions in ledger accounts
To prepare financial statements
To record transactions in chronological order
To calculate net income
#6
Which of the following is an example of a current liability?
Long-term debt
Accounts receivable
Accrued expenses
Common stock
#7
Which financial statement reports a company's revenues and expenses?
Income Statement
Balance Sheet
Statement of Cash Flows
Statement of Retained Earnings
#8
What does ROI stand for in finance?
Return on Investment
Revenue of Interest
Rate of Inflation
Risk of Investment
#9
What is the purpose of double-entry bookkeeping?
To ensure financial transactions are recorded accurately
To minimize taxes
To increase liabilities
To decrease assets
#10
What is the formula to calculate net income?
Net Income = Revenue - Expenses
Net Income = Assets - Liabilities
Net Income = Equity + Revenue
Net Income = Liabilities - Equity
#11
Which accounting principle requires expenses to be recorded in the same period as the revenue they help to generate?
Matching Principle
Consistency Principle
Revenue Recognition Principle
Materiality Principle
#12
What does GAAP stand for in accounting?
Generally Accepted Accounting Procedures
Generally Acknowledged Accounting Principles
Generally Accepted Accounting Principles
General Accounting and Auditing Procedures
#13
What is depreciation in accounting?
An increase in the value of an asset
A decrease in the value of an asset
An increase in equity
A decrease in liabilities
#14
What does FIFO stand for in inventory management?
First In, First Out
First In, Last Out
Fast Inventory for Operational
Financial Items for Organized
#15
What is the purpose of a trial balance?
To ensure the balance of debits and credits
To calculate net income
To prepare financial statements
To record adjusting entries
#16
Which of the following is considered a contra account?
Prepaid Expenses
Accumulated Depreciation
Accounts Payable
Common Stock
#17
What is the formula to calculate return on equity (ROE)?
ROE = Net Income / Total Assets
ROE = Net Income / Total Equity
ROE = Net Income / Total Liabilities
ROE = Total Equity / Net Income
#18
What is the primary goal of financial accounting?
To provide information for internal decision-making
To report a company's financial performance to external parties
To minimize taxes
To increase shareholder value