Fundamentals of Accounting Terms Quiz

Test your knowledge of accounting terms with questions on GAAP, depreciation, FIFO, accruals, financial ratios, and more!

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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

1 answered

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

1 answered

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

1 answered

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

1 answered

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

1 answered

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

1 answered

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

1 answered

Which of the following is NOT an example of a current asset?

Cash

Accounts receivable

Inventory

Buildings

1 answered

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

1 answered

#10

Which of the following is a contra account to accounts receivable?

Bad debt expense

Prepaid expenses

Allowance for doubtful accounts

Accumulated depreciation

1 answered

#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

1 answered

#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

1 answered

#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

1 answered

#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

1 answered

Fundamentals of Accounting Terms Quiz

What does the term 'GAAP' stand for in accounting?

Which financial statement provides a snapshot of a company's financial position at a specific point in time?

What does the acronym FIFO stand for in inventory valuation?

Which financial statement reports a company's revenues and expenses over a specific period of time?

Which financial statement summarizes a company's cash inflows and outflows over a period of time?

What is the accounting equation?

What does the term 'depreciation' refer to in accounting?

Which of the following is NOT an example of a current asset?

What is the accounting principle that requires revenue to be recognized when it is earned, regardless of when payment is received?

Which of the following is a contra account to accounts receivable?

Which accounting principle states that assets should be recorded at their original purchase price, rather than at current market value?

What is the formula to calculate gross profit?

What is the formula to calculate Return on Investment (ROI)?

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?

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