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Financial Accounting (Practice Quiz)

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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 Financial Accounting (Explanation).


  1. 1.

    Financial accounting is focused on the __________ financial statements of a company.

    External
    Right!
    Internal
    Wrong.
  2. 2.

    Financial statements report the fair market value of a company.

    True
    Wrong.
    False
    Right!
  3. 3. Large corporations must follow the
    __________
    accrual
    basis of accounting.
  4. 4. Corporations whose stock is publicly traded must have their financial statements
    __________
    audited
    by independent certified public accountants.
  5. 5.

    The U.S. government agency with authority over the financial reporting requirements of publicly traded corporations is the __________.

    AICPA
    Wrong.
    The AICPA is not a government agency.
    FASB
    Wrong.
    The FASB is not a government agency.
    IRS
    Wrong.
    This government agency is associated with income tax reporting.
    SEC
    Right!
  6. 6.

    The non-government organization that researches and develops new accounting standards is the __________.

    AICPA
    Wrong.
    FASB
    Right!
    IRS
    Wrong.
    This is a government agency.
    SEC
    Wrong.
    This is a government agency.
  7. 7. The acronym for the common rules and standards that companies must follow when preparing its external financial statements is
    __________
    GAAP
    .
  8. 8. SEC is the acronym for
    __________
    Securities and Exchange Commission
    .
  9. 9. FASB is the acronym for
    __________
    Financial Accounting Standards Board
    .
  10. 10. GAAP is the acronym for
    __________
    generally accepted accounting principles
    .
  11. 11.
    __________
    Double
    entry bookkeeping will result in at least two accounts being involved in every transaction.
  12. 12. Every transaction will have one account being credited and one account being
    __________
    debited
    .
  13. 13. The accounting equation is Assets =
    __________
    Liabilities
    + Stockholders' (or Owner's) Equity.
  14. 14. Matching, cost, and full disclosure are examples of the fundamental or basic accounting
    __________
    principles
    .
  15. 15. The profitability of a company for a specified period of time is reported on the
    __________
    income
    statement.
  16. 16. The main components or elements of the income statement are
    __________
    revenues
    , expenses, gains, and losses.
  17. 17. Prepaid insurance is reported as an
    __________
    asset
    on a company's balance sheet.
  18. 18. The word "
    __________
    payable
    " is often in the title of liability accounts.
  19. 19. The statement of cash flows explains the changes in cash and cash
    __________
    equivalents
    during the specified time interval.
  20. 20. The first section of the statement of cash flows is the
    __________
    operating
    activities.

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