Practice Test GeeksAFC - Accounting Fundamentals Certification Practice Test
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Payroll Accounting Flashcards

6 cards from real AFC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 Payroll Accounting flashcards as text

  1. In Accounting Fundamentals Certification, what does the term "net present value" (NPV) represent?

    Answer: The difference between the present value of cash inflows and outflows over time

    Net Present Value (NPV) calculates the present value of all future cash flows (both inflows and outflows) discounted at a required rate of return, helping determine if an investment is worthwhile.

  2. What is the purpose of financial reconciliation in Accounting Fundamentals Certification?

    Answer: To verify that financial records match and identify any discrepancies

    Financial reconciliation compares two sets of records to verify they agree, identifying and resolving discrepancies to ensure financial accuracy and integrity.

  3. In Accounting Fundamentals Certification, what does "liquidity" refer to?

    Answer: The ability to convert assets into cash quickly without significant loss of value

    Liquidity measures how easily and quickly an asset can be converted into cash without significantly affecting its value. Cash is the most liquid asset.

  4. What is the fundamental accounting equation?

    Answer: Assets = Liabilities + Equity

    The fundamental accounting equation (Assets = Liabilities + Equity) is the foundation of double-entry bookkeeping, ensuring that the balance sheet always balances.

  5. In Accounting Fundamentals Certification, what is the purpose of an internal audit?

    Answer: To evaluate and improve risk management, control, and governance processes

    Internal audits independently evaluate the effectiveness of risk management, internal controls, and governance processes, providing recommendations for improvement and ensuring compliance.

  6. What does "accrual accounting" mean in Accounting Fundamentals Certification?

    Answer: Recording revenues and expenses when they are earned or incurred, regardless of cash flow

    Accrual accounting recognizes revenues when earned and expenses when incurred, regardless of when cash actually changes hands, providing a more accurate picture of financial performance.