#1
What does the term 'GAAP' stand for in accounting?
General Accounting and Auditing Principles
Generally Accepted Accounting Principles
Global Accounting and Auditing Procedures
Guidelines for Accounting and Auditing Practices
#2
Which financial statement provides a snapshot of a company's financial position at a specific point in time?
Income statement
Cash flow statement
Balance sheet
Statement of retained earnings
#3
What does the acronym FIFO stand for in inventory valuation?
First-In, First-Out
Final Inventory Financial Objective
Financial Information for Orders
Fixed Inventory Financial Outcome
#4
Which financial statement reports a company's revenues and expenses over a specific period of time?
Balance sheet
Income statement
Statement of cash flows
Statement of retained earnings
#5
Which financial statement summarizes a company's cash inflows and outflows over a period of time?
Income statement
Balance sheet
Statement of cash flows
Statement of retained earnings
#6
What is the accounting equation?
Assets = Liabilities - Owner's Equity
Assets = Liabilities + Owner's Equity
Liabilities = Assets - Owner's Equity
Owner's Equity = Assets + Liabilities
#7
What does the term 'depreciation' refer to in accounting?
An increase in the value of an asset
The process of converting non-cash assets into cash
The allocation of the cost of a tangible asset over its useful life
A decrease in the value of a liability
#8
Which of the following is NOT an example of a current asset?
Cash
Accounts receivable
Inventory
Buildings
#9
What is the accounting principle that requires revenue to be recognized when it is earned, regardless of when payment is received?
Matching principle
Conservatism principle
Revenue recognition principle
Materiality principle
#10
Which of the following is a contra account to accounts receivable?
Bad debt expense
Prepaid expenses
Allowance for doubtful accounts
Accumulated depreciation
#11
Which accounting principle states that assets should be recorded at their original purchase price, rather than at current market value?
Consistency principle
Relevance principle
Historical cost principle
Accrual principle
#12
What is the formula to calculate gross profit?
Net Sales - Cost of Goods Sold
Net Sales + Cost of Goods Sold
Net Income - Operating Expenses
Net Income + Operating Expenses
#13
What is the formula to calculate Return on Investment (ROI)?
(Net Profit / Total Revenue) * 100
(Net Profit / Total Assets) * 100
(Net Profit / Total Equity) * 100
(Net Profit / Total Investment) * 100
#14
In double-entry accounting, if a company records a debit to an asset account, what type of account will the corresponding credit be recorded in?
Asset account
Liability account
Revenue account
Equity account