Accounting Terms (Grade XI)

What does "asset" refer to in accounting?

• A debt owed by the company

• A resource owned by the company

• A type of income

• A financial obligation

Which term describes the money a business owes to creditors?

• Revenue

• Equity

• Assets

• Liabilities

What is "equity" in accounting?

• The total assets of a company

• The ownership interest in the company

• The total debts of a company

• The revenue generated from sales

What does "revenue" mean?

• The costs incurred to operate a business

• The money received from sales or services

• The profit remaining after expenses

• A type of liability

What is "depreciation"?

• The increase in asset value over time

• The gradual reduction in the value of an asset

• The cost of goods sold

• The amount of cash on hand

Which financial statement summarizes a company's revenues and expenses over a period?

• Balance Sheet

• Cash Flow Statement

• Income Statement

• Statement of Changes in Equity

What does "cost of goods sold" (COGS) represent?

• The total income from sales

• The direct costs attributable to the production of goods sold

• The operating expenses of the business

• The net profit of the company

What is the purpose of an "audit"?

• To assess the market value of a company

• To verify the accuracy of financial statements

• To calculate tax liabilities

• To manage daily operations

What is a "financial statement"?

• A document that outlines a company's future earnings

• A report summarizing the financial performance of a business

• A legal document required for tax purposes

• A list of assets and liabilities only

What does "budget" refer to in financial terms?

• A report on past financial performance

• A plan for future income and expenses

• A legal obligation to pay taxes

• A summary of assets and liabilities