Accounting Fundamentals Assessment

What is the accounting equation?

• Assets = Revenue - Expenses
• Assets = Liability + Equity
• Equity = Revenue + Expenses
• Liability = Assets - Revenue

What is the average starting salary for accountants?

• $78,000
• $68,000
• $50,500
• $120,000

Which of the following best defines assets?

• Amounts owed to lenders and suppliers
• Capital amassed by the company
• Resources owned by a company with future economic value
• Money invested by stockholders

What does liquidity refer to?

• The total amount of debt a company has
• The speed at which an asset can become cash
• The value of company stocks
• The amount of equity in a business

What is a liability in accounting terms?

• Resources owned by a company
• Obligations and amounts owed to others
• Profits earned by the business
• Investment returns

What are fixed expenses in a budget?

• Expenses that vary monthly
• One-time purchases
• Costs that do not fluctuate
• Optional spending categories

What education requirement is needed for accountants?

• 2-year Associate's degree
• Master's degree
• 4-year Bachelor's degree
• Professional certification only

What represents equity in a company?

• Total assets minus total liabilities
• Total revenue minus expenses
• Cash and investments only
• Property and equipment value

Which financial statement summarizes a company's assets, liabilities, and equity?

• Income Statement
• Cash Flow Statement
• Balance Sheet
• Equity Statement

What is the primary purpose of an income statement?

• To show only company debts
• To track daily expenses
• To measure financial performance over a specific period
• To record employee salaries