WorksheetsAccounting Fundamentals and the Accounting Cycle
Total questions: 7
Worksheet time: 4mins
Which of the following best defines accounting?
Buying and selling goods
Auditing financial statements
Recording, classifying, and summarizing financial transactions
Managing business operations
Who primarily uses accounting information to assess business performance?
Customers
Business owners
Suppliers
Competitors
Liabilities refer to:
Amount owed by the business
Business expenses
Owner’s investment
Business income
Capital (Equity) represents:
Business profit
Business expenses
Owner’s investment in the business
Amount owed to outsiders
Profit occurs when:
Expenses are more than revenue
Revenue equals expenses
Revenue is more than expenses
Liabilities exceed assets
Which formula represents profit?
Revenue − Expenses
Liabilities − Assets
Assets − Liabilities
Assets + Equity
The accounting equation is:
Assets = Capital − Liabilities
Assets = Liabilities + Equity
Revenue = Expenses + Profit
Assets = Revenue − Expenses
