Financial Transactions and Accounts Quiz

Test your understanding of financial assets, accounting principles, and financial ratios with our comprehensive quiz on financial transactions and accounts.

Practice Learn Test

Which of the following is an example of a financial asset?

Real estate

Stock

Computer equipment

Office furniture

What does the acronym 'GAAP' stand for in accounting?

General Accounting Assessment Protocol

Generally Accepted Accounting Principles

Global Accounting and Auditing Procedure

Governmental Accounting and Auditing Policy

Which of the following is a characteristic of a debit card?

Allows the holder to borrow money from the bank

Requires a PIN for transactions

Offers cash back rewards

Charges interest on purchases

What is the primary purpose of a budget in personal finance?

To track historical spending patterns

To limit spending on non-essential items

To plan for future income and expenses

To invest in the stock market

Which financial statement provides a snapshot of a company's financial position at a specific point in time?

Income statement

Balance sheet

Cash flow statement

Statement of retained earnings

Which accounting principle states that assets should be recorded at their original purchase price?

Matching principle

Revenue recognition principle

Conservatism principle

Historical cost principle

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

Income statement

Balance sheet

Cash flow statement

Statement of retained earnings

What does ROI stand for in finance?

Return on Investment

Rate of Interest

Risk of Inflation

Revenue over Income

What is the formula for calculating the current ratio?

Current Assets / Current Liabilities

Total Assets / Total Liabilities

Net Income / Total Assets

Net Income / Current Liabilities

#10

Which of the following is not a component of the Time Value of Money (TVM)?

Present Value

Future Value

Interest Rate

Earnings Per Share

#11

What is the purpose of the Sarbanes-Oxley Act?

To regulate the stock market

To establish accounting standards

To prevent corporate fraud

To regulate international trade

#12

Which of the following is considered a long-term liability?

Accounts payable

Short-term loan

Mortgage payable

Salaries payable

#13

Which accounting method records revenue and expenses when they are incurred, regardless of when cash is exchanged?

Accrual basis

Cash basis

Depreciation basis

Amortization basis

#14

What does EBITDA stand for in finance?

Earnings Before Interest, Taxes, Depreciation, and Amortization

Earnings Before Income, Taxes, Depreciation, and Amortization

Earnings Before Interest, Taxes, Depreciation, and Asset write-off

Earnings Before Income, Taxes, Depreciation, and Asset write-off

#15

Which financial ratio indicates a company's ability to cover short-term liabilities with its most liquid assets?

Quick ratio

Debt-to-equity ratio

Return on investment

Earnings per share

#16

Which of the following financial ratios measures a company's profitability relative to its shareholders' equity?

Debt-to-equity ratio

Price-to-earnings ratio

Return on equity

Current ratio

#17

What is the formula for calculating the debt-to-equity ratio?

Total Liabilities / Total Assets