Understanding Basic Accounting Concepts

Front

Which type of accounting is primarily used for internal decision-making and is not bound by GAAP or IFRS?

Back

Managerial Accounting

Front

What is the primary purpose of financial accounting?

Back

External reporting

Front

Which financial statement provides a snapshot of a company's financial position at a specific point in time? Options: Income Statement, Statement of Cash Flows, Balance Sheet, Statement of Retained Earnings

Back

Balance Sheet

Front

Back

Front

Which section of the Statement of Cash Flows includes cash flows from buying and selling long-term assets?

Back

Investing Activities

Front

What does the Acid-Test Ratio exclude from its calculation that the Current Ratio includes?

Back

Inventory

Front

Which component of the Income Statement represents the income from primary business activities? Options: Gross Profit, Operating Income, Revenue, Net Income

Back

Revenue

Front

What is the primary focus of cost accounting?

Back

Determining the cost of products or services

Front

Which ratio measures how efficiently a company uses its equity to generate profits?

Back

Return on Equity (ROE)

Front

What is the fundamental accounting equation?

Back

Assets = Liabilities + Owners' Equity