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Accounting Basics (Practice Quiz)

Author:
Harold Averkamp, CPA, MBA

For multiple-choice and true/false questions, simply press or click on what you think is the correct answer. For fill-in-the-blank questions, press or click on the blank space provided.

If you have difficulty answering the following questions, learn more about this topic by reading our Accounting Basics (Explanation).


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1.
Which financial statement reports the revenues and expenses for a period of time such as a year or a month?

Balance Sheet

Wrong.
The balance sheet reports assets, liabilities, and stockholders' equity.

Income Statement

Right!

Statement Of Cash Flows

Wrong.
This financial statement explains how a company's cash balance changed during the accounting period.
2.
Which financial statement reports the assets, liabilities, and stockholders' (owner's) equity at a specific date?

Balance Sheet

Right!

Income Statement

Wrong.
The income statement reports revenues and expenses and the resulting net income.

Statement Of Cash Flows

Wrong.
This financial statement explains how a company's cash balance changed during the accounting period.
3.
Under the accrual basis of accounting, revenues are reported in the accounting period when which of the following occurs?

Cash Is Received

Wrong.

Service Or Goods Have Been Delivered

Right!
4.
Under the accrual basis of accounting, expenses are reported in the accounting period when which of the following occurs?

Cash Is Paid

Wrong.

An Expense Matches The Revenues Or Is Used Up

Right!
5.
Revenues minus expenses equals __________ net income.
6.
Resources owned by a company (such as cash, accounts receivable, vehicles) are reported on the balance sheet and are referred to as __________ assets.
7.
Assets are usually reported on the balance sheet at which amount?

Cost

Right!
This is true because of the cost principle.

Current Market Value

Wrong.
Because of the cost principle, assets are generally not reported at their current market value.

Expected Selling Price

Wrong.
This would violate the cost principle.
8.
Obligations (amounts owed) are reported on the balance sheet and are referred to as __________ liabilities.
9.
Liabilities often have the word __________ payable in their account title.
10.
Unearned Revenues is what type of account?

Asset

Wrong.

Liability

Right!
The company that is to perform the service or is to deliver the product has received the cash in advance and therefore has an obligation (liability) to deliver the service or the product.

Stockholders' (Owner's) Equity

Wrong.
11.
Accounting entries involve a minimum of how many accounts?

One

Wrong.

Two

Right!
Because of the double-entry system, every transaction will affect at least two accounts.

Three

Wrong.
12.
The listing of all of the accounts available for use in a company's accounting system is known as the __________ chart of accounts.
13.
Assets minus liabilities equals __________ stockholders' equity or owner's equity
(net assets if a nonprofit)
.
14.
Which term is associated with "left" or "left-side"?

Debit

Right!

Credit

Wrong.
15.
Which term is associated with "right" or "right-side"?

Debit

Wrong.

Credit

Right!
16.
When cash is received, the account Cash will be __________.

Debited

Right!

Credited

Wrong.
17.
When a company pays a bill, the account Cash will be __________.

Debited

Wrong.

Credited

Right!
18.
What will usually cause an asset account to increase?

Debit

Right!

Credit

Wrong.
19.
What will usually cause the liability account Accounts Payable to increase?

Debit

Wrong.

Credit

Right!
20.
Entries to expenses such as Rent Expense are usually __________.

Debits

Right!

Credits

Wrong.
21.
Entries to revenues accounts such as Service Revenues are usually __________.

Debits

Wrong.

Credits

Right!

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About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.

Learn More About Harold

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