Financial Transactions and Record-Keeping Quiz
Challenge yourself with accounting questions on financial assets, double-entry bookkeeping, financial statements, ratios, and more.
#1
Which of the following is an example of a financial asset?
A piece of land
A government bond
A manufacturing plant
A computer
#2
Which financial statement provides an overview of a company's financial position at a specific point in time?
Income statement
Balance sheet
Cash flow statement
Statement of retained earnings
#3
What is the primary purpose of the Securities and Exchange Commission (SEC) in the United States?
To regulate the stock market
To provide financial assistance to companies
To ensure the safety of consumer products
To enforce securities laws and protect investors
#4
Which financial statement shows the profitability of a company over a specific period of time?
Income statement
Balance sheet
Cash flow statement
Statement of retained earnings
#5
Which of the following is a characteristic of a sole proprietorship?
Limited liability for owners
Separate legal entity from its owners
Multiple owners with shared decision-making
Simplest form of business organization
#6
What is the purpose of double-entry bookkeeping?
To record only one side of a financial transaction
To ensure accuracy in recording financial transactions
To avoid paying taxes
To keep financial records secret
#7
What is the formula for calculating Return on Investment (ROI)?
ROI = (Net Income / Total Revenue) x 100
ROI = (Current Assets - Current Liabilities) / Total Assets
ROI = (Net Profit / Cost of Investment) x 100
ROI = (Total Revenue - Total Expenses) / Total Assets
#8
What is the purpose of depreciation in accounting?
To increase the value of assets
To record the decrease in value of assets over time
To calculate taxes owed
To distribute dividends to shareholders
#9
Which financial ratio measures a company's ability to meet its short-term obligations with its most liquid assets?
Return on Equity (ROE)
Current ratio
Debt-to-Equity ratio
Earnings per Share (EPS)
#10
What does the term 'liquidity' refer to in finance?
A company's ability to pay off its long-term debts
The ease of converting assets into cash without significant loss
The ability of a company to generate profits
The value of a company's fixed assets
#11
What is the purpose of a general ledger?
To record all financial transactions in chronological order
To summarize the financial position of a company
To calculate taxes owed by a company
To prepare financial statements
#12
In double-entry bookkeeping, what does a credit entry indicate?
An increase in assets
An increase in liabilities
An increase in owner's equity
A decrease in assets
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