Accounting Terms and Concepts Quiz

What does the Accruals and Matching Concept in accounting refer to?

• Recording revenues and expenses when they are earned and incurred, regardless of when cash is exchanged

• Recording revenues and expenses based on the budgeted amounts

• Only recording revenues when cash is is received and expenses when cash is paid

• Recording revenues and expenses at the end of the accounting period

What does the term 'Drawings' mean in accounting?

• Withdrawal of assets by the owner for personal use

• Investing in new assets for the business

• Recording sales transactions

• Paying off liabilities

What are 'Trade Payables' in accounting?

• Amounts owed to suppliers for goods or services purchased on credit

• Amounts owed to shareholders for dividends

• Amounts owed to employees for salaries

• Amounts owed to the government for taxes

What are 'Dishonoured Cheques' in accounting?

• Cheques that are not honored by the bank due to insufficient funds

• Cheques that are honored by the bank without any issues

• Cheques that are used for internal transactions within the business

• Cheques that are issued by the business to suppliers

What does 'Discount Allowed' refer to in accounting?

• Discount received from suppliers

• Reduction in the selling price of goods or services offered to customers

• Discount given to employees

• Additional charges added to the selling price of goods or services

What are 'Assets' in accounting?

• Revenue generated by the business

• Resources owned by the business that provide future economic benefits

• Liabilities owed by the business to external parties

• Expenses incurred by the business

What does 'Sales' represent in accounting?

• Investments made by the business

• Cost of goods sold

• Expenses incurred in the production process

• Revenue generated from selling goods or services

What is included in the 'Cost of Sales' in accounting?

• Dividends paid to shareholders

• Interest payments on loans

• Costs directly associated with producing goods or services sold by the business

• Administrative expenses of the business

What does 'Equity' represent in accounting?

• Expenses incurred in the production process

• Revenue generated from sales

• Amounts owed to suppliers for goods purchased on credit

• The residual interest in the assets of the business after deducting liabilities

What are 'Liabilities' in accounting?

• Expenses incurred in the production process

• Obligations owed by the business to external parties

• Resources owned by the business

• Revenue generated from sales