MBA Accounting

Question 1

What does GAAP stand for in the context of U.S. financial reporting?

Accepted Answer

Generally Accepted Accounting Principles

Answer

General Annual Accounting Procedures

Answer

Government Approved Accounting Principles

Answer

Gross Annual Accounting Practices

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

The fundamental accounting equation is best expressed as:

Accepted Answer

Assets = Liabilities + Equity

Answer

Revenue − Expenses = Net Income

Answer

Assets − Liabilities = Revenue

Answer

Equity + Revenue = Assets

Question 4

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

Accepted Answer

LIFO (Last In, First Out)

Answer

FIFO (First In, First Out)

Answer

Weighted Average Cost

Answer

Specific Identification

Question 5

Depreciation in accounting is best described as:

Accepted Answer

The systematic allocation of an asset's cost over its useful life

Answer

The loss in market value of a fixed asset

Answer

The cash outflow for maintaining an asset

Answer

The replacement cost incurred when an asset wears out

Question 6

Which of the following is an example of a current liability on the balance sheet?

Accepted Answer

Accounts payable

Answer

Long-term bonds payable

Answer

Property and equipment

Answer

Common stock

Question 7

The matching principle in accounting requires that:

Accepted Answer

Expenses are recorded in the same period as the revenues they help generate

Answer

Revenue figures match between fiscal quarters

Answer

Asset values match the total of liabilities

Answer

Cash receipts match reported net income