by alex
Accounting is the backbone of any business, providing critical insights into financial health and operational efficiency. This quiz will take you through various aspects of accounting, from basic principles to more complex concepts. Sharpen your pencils and get ready to put your accounting knowledge to the test!
Accounting Quiz Questions Overview
1. What is the primary purpose of financial accounting?
To provide information for internal decision-making
To provide information to external users
To comply with tax laws
To manage company resources
2. Which financial statement shows a company’s financial position at a specific point in time?
Income Statement
Statement of Cash Flows
Balance Sheet
Statement of Retained Earnings
3. What is the accounting equation?
Assets = Liabilities + Revenue
Assets = Liabilities + Equity
Assets = Revenue – Expenses
Assets = Equity – Liabilities
4. Which of the following is a current asset?
Land
Accounts Receivable
Buildings
Equipment
5. What is depreciation?
The increase in value of an asset over time
The allocation of the cost of a tangible asset over its useful life
The reduction of an asset’s value due to market conditions
The process of selling an asset
6. Which principle dictates that revenue should be recognized when it is earned and realizable?
Matching Principle
Revenue Recognition Principle
Cost Principle
Full Disclosure Principle
7. What is the purpose of a trial balance?
To prepare financial statements
To ensure that debits equal credits in the ledger
To record transactions
To adjust entries
8. Which of the following is an example of a liability?
Inventory
Accounts Payable
Prepaid Expenses
Retained Earnings
9. What is the purpose of the statement of cash flows?
To show the company’s profitability
To report the financial position of the company
To provide information about cash receipts and cash payments
To summarize changes in equity
10. What does GAAP stand for?
Generally Accepted Accounting Principles
Global Accounting and Auditing Practices
Governmental Accounting and Auditing Procedures
General Accounting and Auditing Policies
