How Well Do You Know About Business Accounting?

10 Questions | Total Attempts: 117

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How Well Do You Know About Business Accounting?

Accounting is very important in all businesses, public, private or non-profit. With this test, we test your basic knowledge of the basic principles of accounting. Take the quiz and learn more!


Questions and Answers
  • 1. 
    The U.S. government agency with authority over the financial reporting requirements of publicly traded corporations is the...
    • A. 

      AICPA

    • B. 

      FASB

    • C. 

      IRS

    • D. 

      SEC

  • 2. 
    The non-government organization that researches and develops new accounting standards is the...
    • A. 

      AICPA

    • B. 

      FASB

    • C. 

      IRS

    • D. 

      SEC

  • 3. 
    Financial accounting is focused on the... financial statements of a company.
    • A. 

      External 

    • B. 

      Internal        

    • C. 

      Both

    • D. 

      Neither

  • 4. 
    The acronym for the common rules and standards that companies must follow when preparing its external financial statements is…
    • A. 

      AICPA

    • B. 

      GAAP 

    • C. 

      IRS

    • D. 

      SEC

  • 5. 
    The personal assets of the owner of a company will not appear on the company's balance sheet because of which principle/guideline?
    • A. 

      Cost

    • B. 

      Economic Entity 

    • C. 

      Monetary Unit

    • D. 

      Budget

  • 6. 
    Which principle/guideline requires a company's balance sheet to report its land at the amount the company paid to acquire the land, even if the land could be sold today at a significantly higher amount?
    • A. 

      Cost 

    • B. 

      Economic Entity

    • C. 

      Monetary Unit

    • D. 

      Budget

  • 7. 
    A very large corporation's financial statements have the dollar amounts rounded to the nearest $1,000. Which accounting principle/guideline justifies not reporting the amounts to the penny?
    • A. 

      Full Disclosure

    • B. 

      Materiality 

    • C. 

      Monetary Unit

    • D. 

      Economic Unit

  • 8. 
    Which principle/guideline directs a company to show all the expenses related to its revenues of a specified period even if the expenses were not paid in that period?
    • A. 

      Cost

    • B. 

      Matching 

    • C. 

      Monetary Unit

    • D. 

      Economic Unit

  • 9. 
    Accrual accounting is based on this principle/guideline.
    • A. 

      Cost

    • B. 

      Full Disclosure

    • C. 

      Matching 

    • D. 

      Monetary Unit

  • 10. 
    When the accountant has to choose between two acceptable alternatives, the accountant should select the alternative that will report less profit, less asset amount, or a greater liability amount. This is based upon which principle/guideline?
    • A. 

      Conservatism 

    • B. 

      Cost

    • C. 

      Materiality

    • D. 

      Matching

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