Financial Literacy: Accounting Concepts Quiz

What is a sole trader/sole proprietor?

• A business owned by one person

• A business owned by multiple people

• A type of bank account

• A financial institution

What does the term 'debit' refer to in accounting?

• Money received by the business

• The right-hand side of the ledger account

• The left-hand side of the ledger account

• The owner's equity

Which of the following is considered an asset?

• Expenses incurred

• A bank loan

• Owner's equity

• A vehicle owned by the business

What is the accounting equation?

• Assets = Owner's equity + Liabilities

• Assets = Liabilities + Owner's equity

• Assets = Owner's equity + Expenses

• Assets = Owner's equity - Liabilities

If a business has more expenses than income, what is the result?

• Revenue

• Equity

• Loss

• Profit

What are cash receipts?

• Assets owned by the business

• Expenses incurred by the business

• Amounts received and deposited in the bank

• Payments made by the business

Which of the following describes liabilities?

• Investments made by the owner

• Money the business owes to others

• Property owned by the business

• Money earned by the business

What is the purpose of subsidiary journals?

• To manage bank accounts

• To calculate profits and losses

• To record transactions before entering them into the General Ledger

• To track owner's equity

If a business earns $500 and incurs $300 in expenses, what is the profit?

• $200

• $300

• $500

• $800

What is the definition of income in accounting?

• The total assets of the business

• The owner's investment

• Money earned by the business

• Money spent by the business