FREE AFC Accounting Principles and Concepts Questions and Answers

Question 1

Which financial statement displays the revenues and expenses of a company for a period of time?

Accepted Answer

Income Statement

Answer

Balance Sheet

Answer

Cash Flow Statement

Answer

Statement of Stockholder's Equity

Question 2

What is the main purpose of financial accounting?

Accepted Answer

Provide useful, financial information to outsiders

Answer

Organize financial information

Answer

Keep track of company expenses

Answer

Minimize company taxes

Question 3

Which of these is not included as a separate item in the basic accounting equation?

Accepted Answer

Revenues

Answer

Assets

Answer

Liabilities

Answer

Stockholder's Equity

Question 4

The accrual basis of accounting records revenues when they are:

Accepted Answer

Earned

Answer

Collected

Answer

Contracted

Answer

Readily available for use

Question 5

The account format that displays debits, credits, balances, and headings:

Accepted Answer

T- Account

Answer

General Journal

Answer

General Ledger

Answer

Ledger Account

Question 6

Asset accounts have what type of balance?

Accepted Answer

Debit

Answer

Credit

Answer

Contract

Answer

All of the above

Question 7

Which account is not a liability account?

Accepted Answer

Cash

Answer

Accounts payable

Answer

Accrued Expenses

Answer

Notes Payable

Question 8

A ___________ is used to record a business event as they occur throughout the year.

Accepted Answer

Journal Entry

Answer

Ledger

Answer

Trial Balance

Answer

Bank Reconciliation Statement

Question 9

The __________ summarizes the accounting equation in report format.

Accepted Answer

Balance Sheet

Answer

Trial Balance

Answer

Journal

Answer

Ledger

Question 10

Which trial balance is prepared after the closure of temporary accounts?

Accepted Answer

Post-closing trial balance

Answer

Unadjusted trial balance

Answer

Adjusted trial balance

Answer

None of these