Accounting Terms - Multiple Choice Quiz

Which account is affected when a company purchases furniture on credit?

• Cash

• Furniture

• Sales

• Capital

Which of the following is a liability?

• Cash

• Accounts Receivable

• Accounts Payable

• Inventory

The owner's equity is also known as:

• Net Assets

• Gross Profit

• Revenue

• Liability

Which statement is prepared to know the financial position of a business?

• Trial Balance

• Profit & Loss

• Cash Flow Statement

• Balance Sheet

Which of the following is a nominal account?

• Capital

• Bank

• Commission Received

• Building

The amount invested by the owner in the business is called:

• Revenue

• Asset

• Liability

• Capital

Which term refers to the reduction in the value of a fixed asset?

• Appreciation

• Depreciation

• Amortization

• Devaluation

Debit means:

• Increase in liability

• Decrease in asset

• Increase in asset or expense

• Decrease in expense

A person or firm to whom the business owes money is called a:

• Debtor

• Creditor

• Owner

• Partner

The process of recording financial transactions in a journal is called:

• Posting

• Ledgering

• Entry

• Journalizing