Accounting basics

The income statement (=profit and loss statement) measures:

• prifitability

• assets and liabilities

• cash

• all of the above

Which statement shows the value of a business's assets, its liabilities, and its capital or shareholders' equity?

• the income statement (P&L)

• the balance sheet

• the cash flow statement

• all of the above

delayed or postponed until a later time

• retained

• accrued

• deferred

• incurred

Liabilities are things that a business __________.

Resources owned by a company (such as cash, accounts receivable, vehicles) are reported on the balance sheet and are referred to as __________.

• assets

• liabilities

• Shareholders' Equity

• goodwill

_____________ involves preparing financial statements for external use by shareholders, creditors, etc.

• financial accounting

• cost accounting

• bookkeeping

• management accounting

____________ means reducing the value of an asset over the length of its estimated useful time.

Revenues minus expenses equals

• assets

• liabilities

• Shareholders' Equity

• net income

__________ involves recording day-to-day sales and purchases, and revenue received and payments made.

Inspecting and reporting on accounts and financial records is called ___________.

• tax accounting

• management accounting

• auditing

• cost accounting