Financial Transactions and Accounts Quiz

A stock represents ownership in a company and is a financial asset.

GAAP are a set of standard accounting principles used in the U.S. to ensure consistency and transparency in financial reporting.

Debit cards require a PIN for transactions and directly access funds from a linked bank account.

A budget helps individuals allocate resources effectively by planning future income and expenses.

The balance sheet summarizes a company's assets, liabilities, and shareholders' equity at a particular moment.

The historical cost principle requires assets to be recorded at their original purchase price, not their current market value.

The income statement shows a company's financial performance over a specific period by detailing revenues and expenses.

ROI measures the profitability of an investment relative to its cost.

The current ratio measures a company's ability to pay its short-term obligations using its short-term assets.

Earnings Per Share is a measure of a company's profitability and is not directly related to the Time Value of Money.

The Sarbanes-Oxley Act was enacted to improve corporate governance and prevent accounting fraud.

Mortgage payable represents a long-term obligation to repay a loan used to purchase property.

Accrual basis accounting records transactions when they occur, reflecting economic reality rather than cash flow.

EBITDA is a measure of a company's operating performance, excluding certain expenses.

The quick ratio measures a company's ability to meet short-term obligations using its most liquid assets.

Return on equity measures how efficiently a company generates profits from shareholders' investments.

The debt-to-equity ratio measures a company's financial leverage by comparing its total debt to its total equity.