Show Me the Money LAP Quiz

1. An important purpose of accounting is to provide accurate financial information that is useful to

• 1. management.

• 1. suppliers.

• 1. employees.

• 1. marketers.

1. What do managers use for financial planning purposes?

• 1. Business policies

• 1. Accounting information

• 1. Operating standards

• 1. Production schedules

1. A business can determine its net income by subtracting total

• 1. sales revenue from trade credit.

• 1. operating expenses from net worth.

• 1. expenses from gross profit.

• 1. liabilities from assets.

1. A financial statement of a firm’s current assets and liabilities is called a(n)

• 1. income statement.

• 1. profit-and-loss statement.

• 1. balance sheet.

• 1. cash flow projection.

1. The profit a business has earned can be determined from the business’s

• 1. budget.

• 1. assets.

• 1. income statement.

• 1. balance sheet.

1. A business has an inventory valued at $750,000. This amount would appear in the business’s balance sheet under

• 1. capital gains.

• 1. income.

• 1. liabilities.

• 1. current assets.

1. Which of the following would be included in a business’s income statement:

• 1. Operating expenses

• 1. Liabilities

• 1. Cash on hand

• 1. Net worth

1. A characteristic of the accrual method of accounting is that it

• 1. is the method most frequently used by small businesses.

• 1. records credit purchases when the purchases are made.

• 1. is the method used by businesses that don’t offer credit.

• 1. records transactions at the time the money changes hands.

1. What step in the accounting cycle occurs after journal entries are posted to the business’s ledger?

• 1. Source documents are gathered.

• 1. A trial balance is prepared.

• 1. Transactions are classified.

• 1. Receipts are disbursed.