FABM QUIZ

Resources owned or controlled by a business expected to bring future economic benefits are called:

• Liabilities

• Assets

• Capital

• Expenses

Obligations or debts the business must settle in the future are known as:

• Liabilities

• Assets

• Capital

• Expenses

Owner’s investment plus retained earnings, representing the owner’s claim on assets after liabilities, is called:

• Liabilities

• Assets

• Capital

• Expenses

Earnings from the primary operations or other sources are referred to as:

• Expenses

• Capital

• Income (Revenue)

• Liabilities

Costs incurred to earn income or operate the business are known as:

• Assets

• Expenses

• Capital

• Income

It is a set of standardized accounting rules and procedures used in preparing financial statements. This set of standards is called:

• Accounting Equation

• GAAP (Generally Accepted Accounting Principles)

• Capital

• Assets

It is crucial for double-entry bookkeeping. It ensures balance in every transaction, fostering accuracy and reliability in financial records. This principle is called:

• GAAP

• Capital

• Accounting Equation

• Income

What are Assets in accounting?

• Debts a business owes to others

• Owner’s investment in the business

• Resources owned or controlled by a business expected to bring future economic benefits

• Costs incurred to run the business

Which of the following best describes Liabilities?

• Earnings from business operations

• Obligations or debts the business must settle in the future

• Owner’s share of the business

• Resources used to generate income

            What is the primary purpose of the Accounting Equation?

• To calculate tax payments

• To ensure balance in every transaction, supporting double-entry bookkeeping

• To list all business expenses

• To determine employee salaries