Financial Accounting Questions

Which of the following is a primary financial statement?

• Balance Sheet
• B) Income Statement
• C) Cash Flow Statement
• D) All of the above

Which account is increased with a debit?

• Accounts Payable
• B) Revenue
• C) Accounts Receivable
• D) Retained Earnings

Which of the following are considered current assets? (Select all that apply)

• Cash
• Accounts Receivable
• Buildings
• Inventory
• Equipment

Which financial statement reports a company’s financial position at a specific point in time?

• Balance Sheet
• Income Statement
• Cash Flow Statement
• Statement of Retained Earnings

Which of the following is an example of a non-current asset?

• Inventory
• B) Accounts Receivable
• C) Equipment
• D) Cash

What is the purpose of a trial balance?

• To ensure that total debits equal total credits in the ledger
• B) To prepare the financial statements
• C) To reconcile the bank statement
• D) To allocate costs to various departments

What is the primary purpose of an income statement?

• To show the financial position of a company at a specific point in time
• B) To report a company’s revenues and expenses over a period of time
• C) To provide information about cash inflows and outflows
• D) To reconcile the beginning and ending retained earnings

What is the accounting equation?

• Assets = Liabilities + Equity
• B) Assets = Liabilities - Equity
• C) Assets = Revenue + Expenses
• D) Assets = Liabilities x Equity