Chapter 1 - Accounting in Action

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Accounting Basics Quiz

Test your knowledge of foundational accounting principles with this engaging quiz. Designed for aspiring accountants and business owners alike, the quiz covers key concepts and terms that are essential for understanding financial statements and the accounting equation.

Features:

10 multiple-choice questions
Immediate feedback on your answers
Learn accounting basics in a fun way

10 Questions2 MinutesCreated by LearningLedger579

The owner's claim on the assets of the company can be found in the _______ section of the balance sheet:

Liabilities

Owner's equity

Assets

Revenues

The accounting equation can be stated as:

Assets = Liabilities – Owner's Equity.

Assets – Liabilities = Owner's Equity.

Assets + Owner's Equity = Liabilities.

Owner's Equity = Assets + Liabilities.

The Caruzo Uptown Grill receives a bill of $400 from the Erml Advertising Agency. The owner, John Caruzo, is postponing payment of the bill until a later date. The effect on specific items in the accounting equation is:

An increase in Accounts Payable and an increase in Advertising Expense.

A decrease in Accounts Payable and an increase in Revenue Earned.

A decrease in Cash and an increase in Revenue Earned.

An increase in Accounts Receivable and an increase in D. Foerch, Drawings.

Which of the following financial statements is prepared as of a specific date?

True

Income statement.

Statement of owner's equity.

Cash flow statement.

A business organized as a separate legal entity under federal or provincial law having ownership divided into transferable shares is a:

Proprietorship

Corporation

Partnership

All of the above can be organized as a separate legal entity.

Internal users of accounting information include all of the following except:

Production supervisors.

Company officers.

Creditors

Marketing managers.

The going concern assumption is the assumption states that the economic entity will not continue to operate in the foreseeable future.

True

False

Expenses are the costs of assets that are consumed or services that are used in a company's ordinary business activities and they decrease owner's equity.

True

False

A company has liabilities of $210,000. The balance in the owner's capital account is $60,000; in drawings $20,000; revenues $320,000; and expenses $255,000. What are the company's total assets?

$65,000

$590,000

$315,000

$270,000

The primary purpose of a cash flow statement is to provide financial information about the cash receipts and cash payments of a company for a specific period of time.

False

True

Undefined

None of the above

Chapter 1 - Accounting in Action

Accounting Basics Quiz

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