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Accounting Basics

Total questions: 50

Worksheet time: 38mins

Name
Class
Date
1.

Which of the following are Assets?

a)

Bank Account

b)

Bank Loan

c)

Vehicles

d)

Bank overdraft

e)

Furniture and fittings

2.

The following are liabilities .

a)

Bank Loan

b)

Stock / inventory

c)

Mortgage

d)

Accounts Payable

3.

Equity can also be called Capital

a)

TRUE

b)

FALSE

4.

When the business is owed money it is called

a)

Accounts Receivable

b)

Account Payable

5.

The following are expenses

a)

Insurance

b)

Salaries

c)

Sales

d)

Fees Received

e)

Petrol

6.

The following are types of Income

a)

Sales

b)

Fees Received

c)

Salaries

d)

Staff Wages

e)

Advertising

7.

When a business owner invests in the business

a)

This increases equity

b)

This decreases equity

8.

When the owner takes money out the business for personal use it is called

a)

Drawings

b)

Withdrawal

c)

Investment

9.

Assets - Liabilities = Equity

a)

TRUE

b)

FALSE

10.

The following can cause an increase in equity

a)

Owners investments +

b)

Drawings +

c)

Profit

d)

Loss

11.

The following can cause a decrease in equity

a)

Drawings +

b)

Loss

c)

Profit

d)

Income +

12.

If I invest $2000 in my own business this causes

a)

An increase of +$2000 in bank column

b)

An increase of +$2000 in Equity Column

c)

An increase in Income column of +$2000

13.

If I buy equipment for $1000 ....which 2 of the following columns will I write in

a)

This is a - $1000 in bank column

b)

This is a - $1000 in equipment column

c)

This is a + $1000 in equipment column

d)

This is a + $1000 in bank column

14.

If I take home $500 for personal use from my business which transactions will I carry out

a)

Decrease bank Column by - $500

b)

Increase bank Column by + $500

c)

Decrease Equity by - $500

d)

Increase Equity by + $500

15.
The financial statement that reports the revenues and expenses for a period of time such as a year or a month is the:
a)
Balance Sheet
b)
Income Statement
c)
Statement of Cash Flows
d)
None of These
16.
The financial statement that reports the assets, liabilities, and stockholders' (owner's) equity at a specific date is the:
a)
Balance Sheet
b)
Income Statement
c)
Statement of Cash Flows
d)
Cash Statement
17.
Under the accrual basis of accounting, revenues are reported in the accounting period when the:
a)
Cash is Received
b)
Service or Goods Have Been Delivered
c)
End of the Month Has Arrived
d)
Customer Pays
18.
Resources owned by a company (such as cash, accounts receivable, vehicles) are reported on the balance sheet and are referred to as __________.
a)
Assets
b)
Liabilities
c)
Owner Equity
d)
Equity
19.
Assets are usually reported on the balance sheet at which amount?
a)
Cost
b)
Current Market Value
c)
Expected Selling Price
d)
None of These
20.
Obligations (amounts owed) are reported on the balance sheet and are referred to as __________.
a)
Assets
b)
Liabilities
c)
Debt
d)
Owner Equity
21.
Liabilities often have the word __________ in their account title.
a)
Assets
b)
Payable
c)
Paid
d)
Equity
22.
Unearned Revenues is what type of account?
a)
Asset
b)
Liability
c)
Stockholders' Equity
23.
Accounting entries involve a minimum of how many accounts?
a)
One
b)
Two
c)
Three
d)
Four
24.
The listing of all of the accounts available for use in a company's accounting system is known as the __________.
a)
Chart of Accounts
b)
Journal
c)
Ledger
d)
Credit Ledger
25.
Which term is associated with "left" or "left-side"?
a)
Debit
b)
Credit
c)
Plus
d)
Minus
26.
Which term is associated with "right" or "right-side"?
a)
Debit
b)
Credit
c)
Plus
d)
Minus
27.
When cash is received, the account Cash will be
a)
Debited
b)
Credited
28.
When a company pays a bill, the account Cash will be
a)
Debited
b)
Credited
29.
What will usually cause an asset account to increase?
a)
Debit
b)
Credit
30.
What will usually cause the liability account Accounts Payable to increase?
a)
Debit
b)
Credit
31.

Which term dictates that you must record expenses and revenues in the same period in which they occur?

a)

Cost Principle

b)

Matching Principle

c)

Industry Practices Constraint

d)

Objectivity Principle

32.

Assets are usually reported on the balance sheet at which amount?

a)

Current Market Value

b)

Projected Selling Price

c)

Depreciated Value

d)

Cost Price

33.

Which principle/guideline justifies a company violating an accounting principle because the amounts are immaterial?

a)

Materiality

b)

Full Disclosure

c)

Conservatism

d)

Monetary Unit

34.

The personal assets of the owner of a company will not appear on the company's balance sheet because of which principle/guideline?

a)

Conservatism

b)

Cost

c)

Economic Entity

d)

Monetary Unit

35.

What is the accounting equation?

a)

assets = liabilities + expenses

b)

assets = liabilities + equity

c)

assets = income - expenses

d)

assets = revenue - equity

36.

Balance sheets are...

a)

periodic

b)

a snapshot

37.

What is gross profit?

a)

assets - liabilities

b)

revenue - income

c)

revenue - cost of goods sold

d)

income - profit

38.

1. Book-keeping is___________

a)

collecting books in a library

b)

a statement of assets and liabilities

c)

recording business transactions

d)

recording the figures on a bank

statement

39.

The accounting cycle is____________


(i) the method of transport used for staff to come to work

(ii) the steps taken to produce a set of accounts

(iii) the period for which the business produces its

accounts

(iv) the organisation’s tax year

a)

(i) and (ii) only

b)

(iii) and (iv) only

c)

(ii) and (iii) only

d)

(i) and (iv) only

40.

Which one of the following is NOT a source document?

a)

debit note

b)

journal

c)

invoice

d)

petty cash voucher

41.

An invoice must include ___________


(i) the seller’s name and address

(ii) the seller’s date of birth

(iii) the purchaser’s telephone number

(iv) a description of the goods or services supplied

a)

(i) and (ii) only

b)

(ii) and (iv) only

c)

(i) and (iii) only

d)

(i) and (iv) only

42.

A credit note is ________

a)

sent to customer confirming return of goods

b)

sent to supplier requesting the return of goods

c)

received from customer requesting return of goods

d)

received from supplier confirming request for return of goods

43.

Information from a debit note is recorded in the ________

a)

returns inwards journal

b)

returns inwards account

c)

returns outwards journal

d)

returns outwards account

44.

When you record your income when it's received

a)

accrual basis

b)

cash basis

c)

fiscal basis

d)

accounts receivable

45.

The process of transferring money into different accounts

a)

journalizing

b)

transactions

c)

switching accounts

d)

posting

46.

A report of revenue, expenses, and net income or loss

a)

statement of cash flows

b)

income statement

c)

balance sheet

d)

profit and loss statement

47.

Which of the following tasks does a bookkeeper perform?

a)

Analyze financial statements

b)

Payroll

c)

Pay Bills

d)

Day-to-Day accounting functions

48.

If a business prepares 'Annual' financial statements, how long is that period?

a)

Weekly

b)

3 Months

c)

6 Months

d)

12 Months

49.
The financial statement that reports the revenues and expenses for a period of time such as a year or a month is the:
a)
Balance Sheet
b)
Income Statement
c)
Statement of Cash Flows
d)
None of These
50.
Under the accrual basis of accounting, revenues are reported in the accounting period when the:
a)
Cash is Received
b)
Service or Goods Have Been Delivered
c)
End of the Month Has Arrived
d)
Customer Pays

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