NEW
Font size
WorksheetsFI-085 Pretest
Total questions: 10
Worksheet time: 5mins
An important purpose of accounting is to provide accurate financial information that is useful to
management.
suppliers.
employees.
government.
What do managers use for financial planning purposes?
Production schedules
Operating standards
Business policies
Accounting information
A business can determine its net income by subtracting total
liabilities from assets.
expenses from gross margin.
sales revenue from trade credit.
operating expenses from net worth.
A financial statement of a firm's current assets and liabilities is called a(n)
income statement.
cash-flow projection.
balance sheet.
profit-and-loss statement.
The profit a business has earned can be determined from the business's
income statement.
balance sheet.
assets.
budget.
A business has an inventory valued at $750,000. This amount would appear in the business's balance sheet under
current assets.
liabilities.
capital gains.
income.
Which of the following would be included in a business's income statement:
Operating expenses
Liabilities
Cash on hand
Net worth
When customers buy on credit, the money owed the business by the customers is part of the business's
accounts payable.
current liabilities.
accounts receivable.
cash receipts.
A characteristic of the accrual method of accounting is that it
records transactions at the time the money changes hands.
is the method most frequently used by small businesses.
is the method used by businesses that don't offer credit.
records credit purchases when the purchases are made.
What step in the accounting cycle occurs after journal entries are posted to the business's ledger?
Source documents are gathered.
A trial balance is prepared.
Transactions are classified.
Receipts are disbursed.
