Accounting Flashcards
7 cards from real FBLA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Accounting flashcards as text
Which accounting equation is always true?
Answer: Assets = Liabilities + Owner's Equity
The fundamental accounting equation states that Assets equal Liabilities plus Owner's Equity, maintaining the balance of the balance sheet.
Straight-line depreciation is calculated using:
Answer: (Cost − Salvage Value) ÷ Useful Life
Straight-line depreciation divides the depreciable cost (cost minus salvage value) equally over the asset's useful life.
Which of the following transactions would increase total assets and increase total liabilities?
Answer: Business purchases equipment on credit
Buying equipment on credit increases assets (equipment) and simultaneously increases liabilities (accounts or note payable).
The operating activities section of the Statement of Cash Flows includes:
Answer: Cash received from customers
Operating activities include cash flows from the primary business operations, such as cash receipts from customers and cash paid to suppliers.
Which type of account has a normal credit balance?
Answer: Notes Payable
Liability accounts like Notes Payable have normal credit balances because they increase with credits and decrease with debits.
A contra account is one that:
Answer: Offsets a related account and has an opposite normal balance
A contra account has an opposite normal balance to its related account; for example, Accumulated Depreciation reduces the asset Equipment.
Which of the following best describes internal controls in accounting?
Answer: Policies and procedures designed to safeguard assets and ensure accurate records
Internal controls are company-designed policies to prevent fraud, protect assets, and ensure the reliability of financial reporting.