Financial and Accounting Basics Quiz

What is the definition of net worth?

• The difference between assets and liabilities

• The total value of a company's assets

• The amount of money owed to creditors

• The total amount of money a business earns

Which of the following is a type of equity capital?

• Government agencies

• Venture capitalist

• Accounts payable

• Commercial Banks

What does a balance sheet list?

• The forecast of future business performance

• The business's revenues and expenses over time

• The way cash flows into and out of a business

• What a business owns, owes, and its worth at a point in time

What is collateral?

• An accounting report of cash flow

• Property forfeited if a loan is defaulted

• A type of unsecured loan

• A business's net worth

What is the purpose of an income statement?

• To show revenues, expenses, and profit or loss over time

• To list assets, liabilities, and owner's equity

• To record transactions in journals

• To forecast cash receipts and disbursements

What is a secured loan?

• A loan backed by collateral

• A loan not guaranteed with collateral

• A loan from friends and family

• A loan from venture capitalists

How can you apply this basic understanding of accounting to your personal life?

If a company has more revenue than expenses for the period, it has a ____.

• Net Income

• Net Loss

“NET INCOME also known as NET PROFIT” is:

• Profit before you pay taxes and interest

• Profit before you deduct operating expenses

• The money used to pay taxes and health benefits

• Profit left over after all the expenses have been deducted from your total revenue