Essential Accounting Terms Explained Quiz

1. What is amortisation?

Writing off over a period of an asset or a liability

A method of increasing the value of an asset over time.

Allocating the cost of an intangible asset over its useful life.

The process of determining the value of an asset at a specific point in time.

Amortisation refers to the gradual reduction or writing off of an asset or a liability over a period of time, typically done in a systematic manner.

Explanation

Amortisation refers to the gradual reduction or writing off of an asset or a liability over a period of time, typically done in a systematic manner.

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Essential Accounting Terms Explained Quiz - Quiz

Enhance your understanding of Accounting Vocabulary through this focused quiz. It covers key terms and definitions essential for accounting professionals and students, helping to reinforce crucial concepts and... see moreterminology relevant to the field. see less

2. What is depreciation?

A process where an asset increases in value over time.

The total cost of acquiring a non-current asset.

Systematic allocation of the cost or revalued amount of a tangible non-current asset over its useful life

An accounting method used to track daily expenses.

Depreciation refers to the systematic allocation of the cost or revalued amount of a tangible non-current asset over its useful life. It accounts for the gradual wear and tear or obsolescence of the asset.

Explanation

3. What is impairment?

Loss in value of an asset below its depreciated cost (e.g. spoilt inventory etc)

Loss in value of an asset due to market fluctuations (e.g. inflation or deflation).

The increase in value of an asset after its depreciated cost has been reached.

The value of an asset at the time of purchase before any depreciation occurs.

Impairment refers to the reduction in value of an asset below its depreciated cost usually due to factors like damage or obsolescence, not an increase in value or market fluctuations.

Explanation

Impairment refers to the reduction in value of an asset below its depreciated cost usually due to factors like damage or obsolescence, not an increase in value or market fluctuations.

4. What is an associate?

A partnership in which two or more parties share ownership and control of a business.

A project that involves multiple organizations working together for a common goal.

A subsidiary company owned and controlled by another company.

An associate is different from a subsidiary, joint venture, or partnership as it refers to an entity where the investor has significant influence but not full control.

Explanation

An associate is different from a subsidiary, joint venture, or partnership as it refers to an entity where the investor has significant influence but not full control.

5. What is a subsidiary?

A company which is controlled by a parent company

A company that provides financial support to a parent company.

A company that operates independently without any parent company.

A company that competes directly with a parent company.

A subsidiary is a company that is controlled by another company, known as the parent company. The subsidiary operates independently but is ultimately controlled by the parent company.

Explanation

A subsidiary is a company that is controlled by another company, known as the parent company. The subsidiary operates independently but is ultimately controlled by the parent company.

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Aug 04, 2025

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Aug 04, 2025

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