Business Degree Accounting Principles

Question 1

The fundamental accounting equation states that Assets equal Liabilities plus ___.

Accepted Answer

Owner's Equity

Answer

Revenue

Answer

Expenses

Answer

Net Income

Question 2

Which financial statement shows a company's financial position at a specific point in time?

Accepted Answer

Balance Sheet

Answer

Income Statement

Answer

Cash Flow Statement

Answer

Statement of Retained Earnings

Question 3

Double-entry bookkeeping requires that each financial transaction affects at least how many accounts?

Accepted Answer

Two

Answer

One

Answer

Three

Answer

Four

Question 4

Which of the following is an example of a current asset?

Accepted Answer

Accounts Receivable

Answer

Land

Answer

Equipment

Answer

Patents

Question 5

The principle that expenses should be recognized in the same period as the revenues they helped generate is called the:

Accepted Answer

Matching Principle

Answer

Revenue Recognition Principle

Answer

Historical Cost Principle

Answer

Full Disclosure Principle

Question 6

In double-entry bookkeeping, debits increase which type of account?

Accepted Answer

Assets

Answer

Liabilities

Answer

Owner's Equity

Answer

Revenue

Question 7

Which inventory costing method assumes the most recently purchased items are sold first?

Accepted Answer

LIFO

Answer

FIFO

Answer

Weighted Average

Answer

Specific Identification