Accounting Quiz

What is accounting?

• the practice of preparing taxes

• professionals who interpret financial information

• the process of identifying, analyzing, and reporting financial information

• the process of computing Federal income taxes

What does a financial accountant do?

• works on a specific project that may carry over years

• analyzes finances to ensure proper accounting principles are followed

• keeps books and prepares financial statements

• makes recommendations on how to invest money

Which of the following is an example of an asset for a print company?

• copying machine

• employees' salaries

• rent

• interest on business loan

Which of the following is true about equity?

• It balances with assets.

• It equals liabilities minus assets.

• It is the same as assets and liabilities.

• It is the same as net worth.

Which of the following represents the accounting equation?

• Assets = liabilities + equity

• Liabilities = Assets + Equity

• Assets = Liabilities - Equity

• Liabilities = Assets - Equity

What takes place during an accounting cycle?

• creating a cash flow statement

• planning how to spend a tax return

• creating an employee bonus system

• planning how to pay a salary

Which is the final step in the accounting cycle?

• recording transactions

• preparing financials

• adjusting entries

• posting entries to a ledger

Which of the following is an accounting transaction?

• making a phone call

• paying cash for supplies

• thinking about marketing ideas

• researching locations for a retail store

If a business owner gets a loan and deposits the loan proceeds (cash) in her bank account, how is the accounting equation affected?

• + cash, + equity

• + cash, - equity

• + cash, + liability

• + cash, - liability

Every accounting transaction will affect at least how many accounts in the accounting system?

• two

• three

• four

• five