Fundamentals of Accounting and Financial Transactions Quiz
Test your knowledge with 11 questions on accounting basics, financial statements, GAAP, ROI, and more. Perfect for students and professionals.
#1
Which of the following is a fundamental accounting equation?
Assets = Liabilities + Equity
Revenue = Expenses + Net Income
Profit = Revenue - Expenses
Cash Flow = Assets - Liabilities
#2
What does GAAP stand for in accounting?
Generally Accepted Accounting Principles
Global Accounting Assessment Protocol
Government Accounting and Auditing Procedures
General Accounting Analysis Process
#3
Which financial ratio measures a company's ability to meet short-term obligations with its most liquid assets?
Return on Equity (ROE)
Current Ratio
Debt-to-Equity Ratio
Profit Margin
#4
Which financial statement shows a company's financial position at a specific point in time?
Income Statement
Balance Sheet
Statement of Cash Flows
Statement of Retained Earnings
#5
Which financial statement shows the cash inflows and outflows from operating, investing, and financing activities?
Income Statement
Balance Sheet
Statement of Cash Flows
Statement of Retained Earnings
#6
Which financial statement reports a company's revenues and expenses over a period of time?
Balance Sheet
Income Statement
Statement of Cash Flows
Statement of Retained Earnings
#7
In accounting, what does the term 'depreciation' refer to?
Increase in the value of an asset
Recording the cost of assets as an expense over their useful lives
Increase in the company's equity
Recording the sale of an asset
#8
What is the formula to calculate Return on Investment (ROI)?
ROI = (Net Income / Total Assets) * 100
ROI = (Net Income / Equity) * 100
ROI = (Net Income / Total Revenue) * 100
ROI = (Net Income / Total Liabilities) * 100
#9
What is the purpose of double-entry bookkeeping?
To record transactions in two different currencies
To prevent errors in recording financial transactions
To record each financial transaction in at least two accounts
To record only one side of a financial transaction
#10
What does the term 'accrual basis accounting' mean?
Recording transactions only when cash is exchanged
Recording transactions when they occur rather than when cash changes hands
Recording transactions at their original purchase price
Recording transactions at market value
#11
Which accounting principle requires that assets and liabilities should be recorded at their original purchase price?
Conservatism Principle
Matching Principle
Revenue Recognition Principle
Cost Principle
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