Financial Accounting Pop Quiz (Chapter 1 to 4)

Costs incurred or the using up of assets as a result of the main operations of a business are called:

• Liabilities

• Equity

• Revenues

• Expenses

• Net losses

The financial statements that show the beginning balance of equity, the changes in equity that resulted from new investments by the owner, net income (or net loss), withdrawals, and the ending balance of equity is the:

• Statement of financial position

• Statement of cash flows

• Balance sheet

• Income statement

• Statement of changes in equity

Assets created by selling products or services on credit are:

• Accounts payable

• Accounts receivable

• Liabilities

• Expenses

• Equity

Net income appears on which of the following statement(s)?

• Balance sheet

• Income statement

• Statement of changes in equity

• Statement of cash flows

• Both an income statement and statement of changes in equity

Which of the following is not reported on the income statement?

• Revenues earned by a business

• Expenses incurred by a business

• Withdrawals

• Net income

• All of these answers are correct.

A statement of profit and loss is another name for:

• The income statement

• The balance sheet

• The statement of cash flows

• The statement of changes in equity

• The accounting equation

The question of when revenue should be recognized on the income statement (according to GAPP) is answered by the:

• Revenue recognition principle

• Going concern principle

• Monetary unit value

• Business entity principle

• Cost principle

The process of copying journal information to the ledger is called:

• Double-entering

• Posting

• An internal business transaction

• Journalizing

• An external business transaction

Companies experiencing seasonal variations in sales often choose a fiscal year corresponding to their________________

• Natural business year

• Interim year end

• Quarterly year end

• None of the above

The closing process resets, ____________, _____________ and _________ account balances to zero at the end of every account period.

• Revenue

• Expense

• Withdrawals

• Equity