Accounting Basics Quiz

Introduction

Accounting is considered the business language that converts financial events into useful data for the purpose of making decisions. So, when it comes to assisting the company’s stakeholders in determining its performance and financial health, accounting provides support from recording transactions to the preparation of financial statements. This quiz includes the basic accounting principles, financial statements, journal entries, and key concepts such as depreciation, accruals, and cost analysis. Assess your knowledge about the methods businesses use to keep their financial records accurate and transparent!

Quick Info: | 🟢 Beginner | ⏱️ 15 Minutes | ❓ 10 Questions

Key takeaways

✔️Fundamental accounting principles and key concepts used in the financial decision-making process.
✔️How businesses record transactions and prepare accurate financial statement.

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Accounting Basics - Starter Quiz

1 / 10

Question 1. Which of the following accounts is classified as a real account?

A) Wages Account

B) Cash Account

C) Rent Account

D) Commission Account

2 / 10

Question 2. The basic accounting equation is represented as:

A) Assets = Liabilities – Capital

B) Assets = Liabilities + Capital

C) Assets + Liabilities = Capital

D) Assets = Capital – Liabilities

3 / 10

Question 3. The deduction for depreciation is made for the following purpose:

A) To show more profit

B) To reduce tax liability

C) To share the cost of the asset over its useful life

D) To demonstrate appreciation of the asset

4 / 10

Question 4. Which of the various financial reports indicates the financial situation of a firm?

A) Income Statement

B) Balance Sheet

C) Cash Flow Statement

D) Trial Balance

5 / 10

Question 5. Unpaid expenses are classified as:

A) Current liabilities

B) Current assets

C) Fixed assets

D) None of these

6 / 10

Question 6. Which accounting principle dictates that an expense must be recognized in the same period as the related revenue?

A) Prudence

B) Matching

C) Consistency

D) Accrual

7 / 10

Question 7. Be specific about the type of accounting assumptions that will not have any effect on the trial balance?

A) Compensating error

B) Posting error

C) Omission error

D) Transposition error

8 / 10

Question 8. The withdrawal of goods by the owner for personal use is classified as:

A) Sales

B) Drawings

C) Purchase return

D) Income

9 / 10

Question 9. The double-entry system is explained as:

A) Every transaction is recorded twice

B) It has both debit and credit sides

C) Two ledgers are kept

D) None of these

10 / 10

Question 10. Prepaid expenses are stated in the balance sheet under the category of:

A) Liability

B) Expense

C) Asset

D) Revenue

Your score is

The average score is 60%

References

Horngren, C. T., Sundem, G. L., Elliott, J. A., & Philbrick, D. (2018). Introduction to Financial Accounting (11th ed.). Pearson Education.
Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2022). Accounting Principles (14th ed.). Wiley.
Financial Accounting Standards Board (FASB)
https://www.fasb.org

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Accounting Basics Quiz

Introduction

Key takeaways

References

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