Accounting Industry Quiz

What is the purpose of a balance sheet?

• To summarize a company's revenues and expenses

• To show the inflows and outflows of cash within a company

• To provide a snapshot of a company's assets, liabilities, and shareholders' equity

• To record all financial transactions of a company

Which financial statement shows a company's revenues, expenses, and net income or loss over a specific period?

• Balance Sheet

• Income Statement

• Cash Flow Statement

• General Ledger

What does the cash flow statement show?

• Inflows and outflows of cash within a company

• Assets, liabilities, and shareholders' equity at a specific point in time

• Revenues, expenses, and net income or loss over a specific period

• All financial transactions of a company

What is the purpose of a general ledger?

• To summarize a company's revenues and expenses

• To show the inflows and outflows of cash within a company

• To record all financial transactions of a company

• To allocate the cost of an asset over its useful life

What does accounts payable represent?

• The amount of money owed to a company by its customers

• The amount of money a company owes to its suppliers or creditors

• The direct costs associated with producing or acquiring goods

• Long-term tangible assets used in the production of goods or services

What does accounts receivable represent?

• The amount of money owed to a company by its customers

• The amount of money a company owes to its suppliers or creditors

• The direct costs associated with producing or acquiring goods

• Long-term tangible assets used in the production of goods or services

What is depreciation?

• Expenses or revenues that have been incurred or earned but not yet recorded

• The systematic allocation of the cost of an asset over its useful life

• A list of all the general ledger accounts and their balances

• Calculations used to assess a company's financial performance

What are accruals?

• The amount of money owed to a company by its customers

• The amount of money a company owes to its suppliers or creditors

• Expenses or revenues that have been incurred or earned but not yet recorded

• Long-term tangible assets used in the production of goods or services

What is the purpose of a trial balance?

• To summarize a company's revenues and expenses

• To show the inflows and outflows of cash within a company

• To ensure that debits equal credits

• To allocate the cost of an asset over its useful life

What are financial ratios used for?

• To summarize a company's revenues and expenses

• To show the inflows and outflows of cash within a company

• To assess a company's financial performance, liquidity, solvency, and profitability

• To allocate the cost of an asset over its useful life