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General Accounting Knowledge Trivia Quiz

Some accounting that everyone should have a taste of.

A multiple-choice quiz by blink_angel_182. Estimated time: 4 mins.

Author
blink_angel_182

Time
4 mins

Type
Multiple Choice

Quiz #
257,507

Updated
Dec 03 21

# Qns
10

Difficulty
Average

Avg Score
7 / 10

Plays
6049

Last 3 plays: Guest 196 (5/10), Guest 173 (8/10), Guest 112 (0/10).

One at a Time - Single Page - Timed Game

Question 1 of 10

1. What does the abbreviation GAAP stand for? Hint

Great Accepted Accounting Principles

Great American Accounting Principles

Generally Accepted Accounting Principles

Generally American Accounting Principles

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Question 2 of 10

2. What is the amount collected from the sale of goods and services called? Hint

Growth

Profit

Credit

Revenue

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Question 3 of 10

3. What is it called when your expenses are greater than your revenues on an income statement? Hint

Minor Loss

Debt

Net Loss

Loss

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Question 4 of 10

4. Which accounting principle states that the same amount of time must be used for each accounting period? Hint

Accounting Period Principle

Time Period Principle

Written Period Principle

Bookkeeping Period Principle

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Question 5 of 10

5. What is the cash basis of accounting? Hint

Cash is always the most liquid asset.

Revenue and expenses are recognized as cash comes in or goes out.

All assets must be recorded by how much cash they're worth at that very moment.

When cash comes in, something else must go out.

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Question 6 of 10

6. This can be written either in an account form or a report form. Hint

Balance Sheet

Trial Balance

Income Statement

Journal Entry

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Question 7 of 10

7. Which of the following is not considered a financial statement? Hint

Balance Sheet

Trial Balance

Income Statement

These Are All Financial Statements

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Question 8 of 10

8. When completing the financial statements, it is necessary to complete the income statement before the balance sheet.

True

False

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Question 9 of 10

9. An income statement encompasses which of the following? Hint

Expenses, Revenues, Net Income or Net Loss

Liquidity and Maturity

Assets, Liabilities, Owners Equity

T-Charts, Balance Sheets and Trial Balances

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Question 10 of 10

10. When an owner takes out money from the business for personal use, its impact on equity is recorded on the credit side.

True

False

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Dec 13 2024 : Guest 196: 5/10
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Quiz Answer Key and Fun Facts

1. What does the abbreviation GAAP stand for?

Answer: Generally Accepted Accounting Principles

There are various generally accepted accounting principles that should always be followed by all businesses if they don't want the trouble of having auditors keep a close eye on their company.

2. What is the amount collected from the sale of goods and services called?

Answer: Revenue

When a company does a service or sells something revenue is recorded on an income statement and raises the overall equity of the owner.

3. What is it called when your expenses are greater than your revenues on an income statement?

Answer: Net Loss

You'd have a loss because you've lost money in that period of time and it would be a net meaning overall during the accounting period.

4. Which accounting principle states that the same amount of time must be used for each accounting period?

Answer: Time Period Principle

Accounting statements can be made on period of time such as monthly, annually, semi-annually etc. Every time a statement is made it should be made on the same duration of time each time to follow the time period principle.

5. What is the cash basis of accounting?

Answer: Revenue and expenses are recognized as cash comes in or goes out.

The cash basis of accounting is rarely used, however when it is used, it is recorded on an income statement when the owner of a company physically receives a payment for their goods or services or sends out a check for an expense they incurred.

6. This can be written either in an account form or a report form.

Answer: Balance Sheet

The account form balance sheet is divided into two columns assets and liabilities and equity. The report form balance sheet has assets, liabilities and equity all down a single column.

7. Which of the following is not considered a financial statement?

Answer: Trial Balance

Financial statements are what the investors in the company can see. Balance Sheets and Income Statements show how a company is doing at a certain point in time. A trial balance is just a method of checking there are no errors in calculations.

8. When completing the financial statements, it is necessary to complete the income statement before the balance sheet.

Answer: True

The income statement must always be written before the balance sheet because the income statement generates a net income or loss which needs to be known so the owner equity on the balance sheet must be the same.

9. An income statement encompasses which of the following?

Answer: Expenses, Revenues, Net Income or Net Loss

The income statement shows expenses, and revenues for a specific period of time and the net income or loss are calculated by subtracting expenses from revenues. If the number is negative the company is experiencing a net loss, if it's positive it's a net income.

10. When an owner takes out money from the business for personal use, its impact on equity is recorded on the credit side.

Answer: False

When cash is taken out, cash decreases on the credit side therefore the impact on the equity must occur on the opposite side, namely the debit side.

Source: Author blink_angel_182

This quiz was reviewed by FunTrivia editor Bruyere before going online.
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