Ultimate Trivia On Business Accounting!

Explanation
The financial statement that reports the revenues and expenses for a period of time such as a year or a month is called an income statement. This statement provides information on the company's financial performance by showing the total revenues earned and the expenses incurred during a specific period. It helps stakeholders assess the profitability and efficiency of the business. The income statement is also known as the profit and loss statement or statement of earnings.

Explanation
Liabilities are the factors that a business owes or needs to pay. This includes any debts or obligations that the business has, such as loans, accounts payable, or accrued expenses. Liabilities represent the financial obligations of the business and are recorded on the balance sheet. They are important for determining the financial health and stability of a business, as they indicate the amount of debt that the business has and its ability to meet its financial obligations.

Explanation
Liabilities are the factors that a business owes or needs to pay. These can include debts, loans, and obligations to suppliers, employees, and other parties. Liabilities represent the company's financial obligations and are recorded on the balance sheet. They are important for understanding the financial health and obligations of a business.

Explanation
Assets can indeed be classified into fixed and current assets. Fixed assets are long-term assets that are not easily converted into cash, such as buildings, land, and equipment. Current assets, on the other hand, are short-term assets that can be easily converted into cash within a year, such as cash, accounts receivable, and inventory. This classification helps businesses and individuals to better understand and manage their assets based on their liquidity and usage.

Explanation
Accruals are expenses that have been incurred but not yet paid. They are also known as outstanding expenses because they are amounts that are owed by a company but have not yet been settled. This term is commonly used in accounting to refer to expenses that have been recognized but not yet recorded in the books of accounts.

Explanation
An increase in retained earnings can be explained by net income. Net income is the amount of revenue left over after deducting all expenses, taxes, and interest. When a company has a positive net income, it means that it is generating more revenue than it is spending. This excess revenue is added to the retained earnings, increasing the overall amount. Therefore, net income is a factor that contributes to the growth of retained earnings over time.

Explanation
A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific date. It reports the assets, liabilities, and stockholders' equity of the company. This statement helps investors, creditors, and other stakeholders understand the company's financial health and its ability to meet its financial obligations. Unlike an income statement, which shows the company's financial performance over a period of time, a balance sheet provides a static view of the company's financial position at a particular moment. The statement of cash flows reports the company's cash inflows and outflows, while a budget is a financial plan for future periods.

Explanation
Debit is the term associated with "left" or "left-side" in accounting. In double-entry bookkeeping, transactions are recorded using debits and credits. Debit refers to the left side of an account, where increases in assets and expenses are recorded. On the other hand, credit refers to the right side of an account, where increases in liabilities, equity, and revenue are recorded. Therefore, the correct answer is Debit.

Explanation
When cash is received, the account Cash will be debited. This is because in accounting, the debit side of an account represents an increase in assets. Since cash is an asset, when it is received, the Cash account is debited to reflect the increase in cash balance.

Explanation
The correct answer is "Net income." Net income is the amount of money a company has left over after deducting all expenses from its revenues. It represents the company's profitability and is often used to assess its financial performance. Net income is calculated by subtracting expenses, such as operating costs, taxes, and interest, from total revenues. It is an important measure for investors and stakeholders as it indicates the company's ability to generate profits.