IKM Core Financial Accounting 2

Question 1

Which financial statement reports revenues and expenses over a period?

Accepted Answer

Income Statement

Answer

Balance Sheet

Answer

Statement of Cash Flows

Answer

Statement of Retained Earnings

Question 2

What is the accounting equation?

Accepted Answer

Assets = Liabilities + Equity

Answer

Revenue - Expenses = Profit

Answer

Cash In - Cash Out = Net Cash

Answer

Debits = Credits

Question 3

Under accrual accounting, when is revenue recognized?

Accepted Answer

When goods or services are delivered

Answer

When cash is received

Answer

When the contract is signed

Answer

At fiscal year end

Question 4

What does GAAP stand for?

Accepted Answer

Generally Accepted Accounting Principles

Answer

General Auditing and Accounting Procedures

Answer

Global Accounting and Assurance Protocols

Answer

Governmental Accounting Advisory Panel

Question 5

Which depreciation method allocates an equal amount each year?

Accepted Answer

Straight-line

Answer

Double declining balance

Answer

Sum of years' digits

Answer

Units of production

Question 6

What is the purpose of a trial balance?

Accepted Answer

Verify total debits equal total credits

Answer

Calculate tax liability

Answer

Prepare the tax return

Answer

Reconcile bank statements