Accounting Quiz

Defined as a "resource controlled by the entity as a result of past transactions and events and from which the future economic benefits are expected to flow to the entity."

• Owner's Equity

• Liabilities

• Capital

• Asset

The following are essential characteristics of Liabilities except?

• Results of past transactions or events

• Present obligations

• Requires an outflow of resources embodying economic benefits

• Controlled by the entity only

These are assets and liabilities that are expected to be consumed by the entity within twelve (12) months or less than a year.

• Current Asset and Non-Current Liabilities

• Real Asset and Real Liabilities

• Current Asset and Liabilities

• Current Liabilities and Non-current Asset

When an account is entered on the left side of the account it is considered?

• An increased account

• A debit account

• A credit account

• A transaction

The basic accounting formula is:

• Liabilities and Owner's equity combined is equal to the current asset

• Liabilities should be equal to the combined Asset and Owner's Equity

• Assets must be used to pay the liabilities and the remaining will be considered residual interest or owner's equity

• An asset is equal to the difference between total liabilities and total owner's equity.

All business transactions when journalizing must have a minimum of how many accounting entries?

• One

• Four

• Two

• Three

What is the formula in finding the net income?

• Revenue = Expenses + Cost of Goods Sold

• Net Income = Total Gross Profit - Expenses - Cost of Sales

• Revenue - Cost of Sales = Total Gross Profit - Expenses = Net Income

• Cost of Goods Sold - Revenue = Net Income

Which of the following does not affect the owner's equity?

• Accounts Receivable

• Revenue

• Drawings

• Capital

What is considered the residual interest?

• Owner's Equity

• Liabilities

• Asset

• Non- Current Assets and Liabilities

What calendar periods should accountants base their Financial Reporting on?

• Business calendar year

• Fiscal Year

• Cash Calendar Year

• Calendar Year