Basic Accounting Quiz

What are the three basic activities of accounting?

• Identify, Record, Communicate

• Count, Save, Spend

• Plan, Execute, Review

• Buy, Sell, Trade

What does the accounting equation state?

• Assets = Liabilities + Equity

• Assets = Liabilities - Equity

• Assets + Liabilities = Equity

• Assets - Liabilities = Equity

Who are internal users of accounting data?

• Managers

• Competitors

• Suppliers

• Customers

What is the purpose of financial statements?

• To report financial performance

• To pay taxes

• To hire employees

• To sell products

What is an example of an external user of accounting data?

• Tax authorities

• Employees

• Shareholders

• Managers

What is the first step in the accounting process?

• Identifying events

• Recording transactions

• Preparing reports

• Analyzing data

What does the term 'equity' refer to?

• Owner's claim on assets

• Total liabilities

• Cash in hand

• Total revenue

What is the purpose of the income statement?

• To show profit or loss

• To list assets

• To record cash flow

• To show equity

What is a liability?

• A debt owed by the company

• A type of asset

• Cash owned by the company

• A source of income

What is the role of ethics in accounting?

• To ensure honesty and fairness

• To increase profits

• To reduce costs

• To hire more staff