Basic Accounting Knowledge

Which financial statement will tell you how profitable a company is?

• Income statement

• Cash flow statement

• Balance sheet

• All of the above

2. In accounting, Debit (Dr) means which side of a ledger account?

• Left

• Right

• Middle

• Both Sides

3. Which of the following is the accounting equation?

• Assets = Capital – Liabilities

• Capital = Assets + Liabilities

• Assets = Capital + Liabilities

• Capital = Assets + Liabilities

4. Which of these is the most important feature of accounting?

• Summarizing the transactions

• Recording transactions and financial activity

• Interpreting the accounts

• Noting down the debits and credits

Which of the following is not considered a financial statement?

• Trial Balance

• Profit and Loss account

• Balance Sheet

• These Are All Financial Statements