Financial Transactions and Procedures Quiz

Explore financial transactions, ROI, financial statements, ratios, and principles in this accounting quiz. Test yourself now!

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

Sending an email

Buying groceries with cash

Watching a movie

Reading a book

What does the term 'ROI' stand for in finance?

Return on Investment

Rate of Interest

Risk of Inflation

Revenue from Operations

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

Balance Sheet

Income Statement

Cash Flow Statement

Statement of Retained Earnings

What is the term for the process of converting assets into cash?

Depreciation

Accrual

Liquidity

Amortization

What is the purpose of a general ledger in accounting?

To record daily transactions

To calculate taxes

To manage human resources

To forecast future expenses

Which of the following is an example of an operating expense?

Purchase of equipment

Loan interest payment

Salary of employees

Dividend payment to shareholders

What is the primary function of an auditor in financial transactions?

To prepare financial statements

To provide investment advice

To verify the accuracy of financial records

To manage payroll

What is the purpose of accounts payable in accounting?

To record assets purchased on credit

To manage employee salaries

To calculate tax deductions

To track inventory levels

Which financial ratio measures a company's ability to pay its short-term obligations?

Return on Assets (ROA)

Debt-to-Equity Ratio

Current Ratio

Quick Ratio

#10

What does the term 'EBITDA' stand for in finance?

Earnings Before Interest, Taxes, and Depreciation Allowance

Earned Benefits for Investment, Tax Deductions, and Allowances

Earned Benefits for Income Tax, Depreciation, and Allowances

Earnings Before Interest, Taxes, Depreciation, and Amortization

#11

Which financial statement provides information about a company's cash receipts and cash payments?

Income Statement

Balance Sheet

Statement of Cash Flows

Statement of Stockholders' Equity

#12

What is the formula for calculating Return on Equity (ROE)?

(Net Income / Total Assets) * 100

(Net Income / Shareholders' Equity) * 100

(Net Income / Total Liabilities) * 100

(Net Income / Total Revenue) * 100

#13

In double-entry accounting, what happens when a liability increases?

Another liability decreases

An asset decreases

An equity account increases

Another liability increases

#14

What does the term 'amortization' refer to in finance?

The process of allocating the cost of an intangible asset over its useful life

The process of reducing the value of a fixed asset over time

The process of recording revenue as it is earned

The process of converting assets into cash