4.01 Accounting Quiz

What is the primary purpose of accounting in a business?

• To make sales decisions

• To design marketing strategies

• To keep financial records

• To hire employees

Which of the following is NOT an asset?

• Inventory

• Loan from a bank

• Cash

• Equipment

In accounting, what term is used to describe the money owed by a business to others?

• Assets

• Revenue

• Liabilities

• Owner’s equity

Scenario: A business has just completed its accounting cycle. What is the next step they should take?

• Start a new marketing campaign

• Prepare financial statements

• Hire more staff

• Purchase more inventory

Which statement best describes the importance of accounting to businesses?

• It helps in creating advertisements

• It enables them to maintain control of their money

• It assists in product design

• It aids in employee recruitment

What does a cash flow statement primarily show?

• The company’s profitability

• The movement of cash in and out of the business

• The company’s assets and liabilities

• The company’s sales figures

Scenario: A company’s accountant is analyzing financial transactions. What is the next step in the accounting cycle?

• Journalize transactions

• Post to ledgers

• Balance the books

• Close the books

What is the main difference between finance and accounting?

• Finance focuses on money management, while accounting focuses on recordkeeping

• Finance is used only in large companies, while accounting is used in all businesses

• Finance deals with marketing, while accounting deals with sales

• There is no difference

Who are considered internal users of accounting information?

• Investors

• Creditors

• Managers

• Customers

Which financial statement captures the financial condition of the business at a specific moment?

• Balance sheet

• Cash flow statement

• Income statement