Accounting and Finance Quiz

Which of the following is a measure of how well a business generates cash flow:

• Return on capital

• Accounts receivable

The process of keeping the financial records of a business is known as

• controlling.       

• accounting.   

Checks, receipts, invoices, and purchase orders are examples of

• department ledgers.

• source documents.

What type of accounting method would most likely be used by a small business owner who does not offer credit?

• Cash method

• Accrual method 

What type of accounting method would most likely be used by a large business that has a large number of outstanding loans and customer charge accounts?

• Accrual method

• Cash method  

Which of the following is a true statement:

• Bookkeeping is limited to information on sales.  

• Bookkeeping records business transactions.

Which of the following presents the first three steps in the accounting cycle in the correct order:

• Analyze, journalize, and post

• Analyze, post, and journalize   

Which of the following categories of information are found on a balance sheet:

• Assets, liabilities, owner’s equity 

• Income, expenditures, profit   

The overall purpose of accounting is to

• control the finances of the business.

• keep track of sales.

Which of the following financial reports provides estimates of when, where, and how much money will come into and out of a business next year:

• Cash flow statement   

• Balance sheet