WorksheetsFinancial Accounting
Total questions: 30
Worksheet time: 23mins
How are increases in assets recorded?
On the credit side
On the debit side
On both sides
Not recorded
How are increases in liabilities recorded?
On the debit side
On both sides
On the credit side
Not recorded
What is the normal balance of an asset account?
Credit
Debit
No balance
Either debit or credit
Which of the following is a credit balance account?
Cash
Equipment
Accounts Payable
Rent Expense
How do debits and credits affect revenue accounts?
Debits increase, credits decrease
Debits decrease, credits increase
Debits and credits both increase
Debits and credits both decrease
How do debits and credits affect expense accounts?
Debits increase, credits decrease
Debits decrease, credits increase
Debits and credits both increase
Debits and credits both decrease
Which financial statement shows the distribution of dividends?
Income statement
Statement of financial position
Retained earnings statement
Statement of cash flows
What is a journal in accounting?
A report of a company’s financial position
A document used to record business transactions in chronological order
A form used for filing taxes
A record of financial decisions
What is the purpose of the general ledger?
To summarize the company's revenues
To keep track of changes in all accounts
To report annual income
To record tax transactions
What is a trial balance?
A detailed financial statement
A report used to calculate taxes
A list of accounts and their balances at a given time
A summary of financial errors
What does it mean if a trial balance balances?
All errors have been corrected
The debit and credit columns are equal
There are no errors in the journal entries
The financial statements are ready for publishing
What is unearned revenue classified as?
An asset
A liability
Revenue
An expense
What does the normal balance of a revenue account look like?
Debit
Credit
Both debit and credit
No balance
What happens when a company declares a dividend?
Retained earnings increase
Assets increase
Liabilities increase
Dividends payable decrease
What is the effect of paying salaries on a company's accounts?
Debit Salaries Expense, Credit Cash
Debit Salaries Expense, Credit Revenue
Debit Cash, Credit Salaries Expense
Debit Revenue, Credit Cash
How is an office supplies purchase on account recorded?
Debit Cash, Credit Supplies
Debit Supplies, Credit Accounts Payable
Debit Accounts Payable, Credit Supplies
Debit Revenue, Credit Cash
What are the steps in preparing a trial balance?
Identify accounts, prepare journal entries, finalize accounts
List accounts, total debit and credit columns, verify equality
Record transactions, file tax reports, reconcile accounts
Summarize revenues, calculate taxes, report earnings
What is retained earnings?
A liability account
A measure of the company's retained profit
A form of dividend payment
The total of cash reserves
What is the normal balance of an expense account?
Debit
Credit
Both debit and credit
No balance
What is the relationship between revenues and retained earnings?
Revenues decrease retained earnings
Revenues increase retained earnings
Revenues have no effect on retained earnings
Revenues are not included in retained earnings
Which financial statement shows the financial condition of a company at a specific point in time?
Income statement
Statement of cash flows
Statement of financial position
Retained earnings statement
How is the purchase of equipment for cash recorded?
Debit Cash, Credit Equipment
Debit Equipment, Credit Cash
Debit Equipment, Credit Accounts Payable
Debit Accounts Payable, Credit Cash
If a company purchased equipment for €10,000 and paid €3,000 in cash, how much would be recorded in Accounts Payable?
€13,000
€10,000
€7,000
€3,000
A company provides services and earns €5,000, receiving €2,000 in cash and the rest on account. How much will be recorded in Accounts Receivable?
€5,000
€3,000
€2,000
€7,000
A business started with €50,000 in Share Capital—Ordinary. After generating revenues of €25,000 and incurring expenses of €15,000, what is the net income?
€10,000
€25,000
€40,000
€15,000
A company declared dividends of €4,000. If retained earnings before dividends were €18,000, what will be the retained earnings after dividends are paid?
€22,000
€14,000
€4,000
€18,000
A company has cash of €12,000, accounts receivable of €8,000, and equipment worth €20,000. If it also has accounts payable of €6,000, what is the company’s total equity?
€26,000
€28,000
€34,000
€14,000
A company’s salaries expense for the month is €4,500. If the company has already paid €3,000 in cash, how much will be recorded as Salaries Payable?
€4,500
€1,500
€3,000
€7,500
The company’s beginning retained earnings were €30,000. If the company’s net income for the period is €12,000 and it paid €6,000 in dividends, what will be the ending retained earnings?
€36,000
€24,000
€18,000
€42,000
Which concept ensures that a business is treated as separate from its owners in accounting?
Going Concern
Entity Assumption
Materiality Principle
Matching Principle
