Basic Accounting Trivia Quiz

Basic Accounting

Answer 15 questions on beginning accounting concepts.

1 / 15

In double-entry accounting, what is true of total debits and credits on a transaction?

Debits always exceed credits

Debits usually exceed credits

Debits must equal credits

Credits usually exceed debits

Credits always exceed debits

2 / 15

Which of the following versions of the accounting equation is accurate?

Assets = Liabilities - Equity

Equity = Assets - Liabilities

Assets = Revenues - Expenses

Liabilities + Assets = Equity

Assets = Equity - Liabilities

3 / 15

What financial statement shows a company's financial position as of a single date?

Cash flow statement

Income statement

Retained earnings statement

Statement of stockholder's equity

Balance sheet

4 / 15

Which of the following is a liability?

Paid in capital in excess of Par

Salaries expense

Accounts payable

Inventory

Retained earnings

5 / 15

Which of the following financial statements is NOT generally required by public corprations in America?

Cash Flow Statement

Balance Sheet

Income Statement

Cost Analysis Report

Statement of Stockholder's Equity

6 / 15

Which of the following is considered an asset?

Prepaid expenses

Deferred tax deductions

Inventory

Accounts receivable

All of the Above

7 / 15

What generally happens to Revenue and Expense accounts at the end of an accounting period?

Nothing

They're closed and balances set back to 0, with the profit or loss charged to an equity account

They're closed and balances set back to 0, with the profit or loss charged to an asset account

They're closed and balances set back to 0, with the profit or loss charged to a liability account

8 / 15

What two components are used to calculate Gross Profit on an Income Statement? [Choose 2 answers]

Sales Revenue

Operating Expenses

Interest Expense

Cost of Goods Sold

Income Tax Expense

9 / 15

Which two of the following items normally have a credit balance? [Choose 2 answers]

Accounts Receivable

Accumulated Depreciation

Interest Revenue

Goodwill

Interest Expense

10 / 15

Purchasing equipment with a bank loan increases which of the following?

Assets only

Liabilities only

Both assets and liabilities

Neither assets or liabilities

11 / 15

What is the accounting item used to record transactions chronologically?

10k

Ledger

Comprehensive income statement

Journal

Trial balance

12 / 15

From an accounting perspective, what is the purpose of Depreciation Expense?

Record a payment for the equipment

Modify an asset value to reflect its change in resale value

Allocate cost over its useful life

Record damage to the equipment

13 / 15

Which of the following is NOT a major section of the Cash Flow statement?

Cash Flow from Operating Activities

Cash Flow from Ownership Transactions

Cash Flow from Investing Activities

Cash Flow from Financing Activities

14 / 15

Accrual accounting records revenue when:

Earned

Billed

Paid in full

Deposited

15 / 15

What organization is in charge of setting Generally Accepted Accounting Principles (GAAP) used by for-profit corporations?

Securities and Exchange Commission (SEC)

Governmental Accounting Standards Board (GASB)

Public Company Accounting Oversight Board (PCAOB)

Federal Reserve (Fed)

Financial Accounting Standards Board (FASB)

Your score is

The average score is 62%

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