Accounting Basics Quiz

What does GAAP stand for in accounting?

• Generally Accepted Accounting Principles

• General Accounting and Auditing Practices

• Government Approved Accounting Policies

• Global Accounting and Auditing Procedures

What type of business is a Sole Proprietor Service Business?

• A single-owner business providing services

• A corporation with multiple owners

• A partnership selling goods

• A franchise offering products

Which financial statement shows revenues, expenses, and net income?

• Income Statement

• Balance Sheet

• Statement of Retained Earnings

• Trial Balance

What is the purpose of Adjusting Entries in accounting?

• To update accounts at the end of a period

• To record new business transactions

• To close temporary accounts

• To prepare financial statements

What is Net Pay?

• Gross earnings minus deductions

• Total earnings before deductions

• Fixed pay for a period

• Pay based on a percentage of sales

Which tax is withheld for the federal government based on income and allowances?

• Federal Income Tax

• State Income Tax

• Social Security Tax

• Medicare Tax

What are voluntary deductions?

• Optional withholdings like health insurance and retirement contributions

• Mandatory taxes deducted from salary

• Employer's share of payroll taxes

• State-specific unemployment taxes

What is the purpose of the FUTA tax?

• To fund Social Security benefits

• To fund unemployment benefits

• To fund Medicare

• To fund state-specific programs

What does a W-2 Form report?

• Employee's eligibility to work in the U.S.

• Annual wages and taxes withheld for employees

• Employee's tax withholding preferences

• Employer's payroll taxes

What is a Sales Invoice?

• A document issued to a customer for goods sold on account

• A record of cash sales from a point-of-sale system

• A proof of cash received from a customer

• A tax on goods sold