Grade 11 Accounting Review Trivia Quiz

2.

Which of the following is not a feature of the Balance Sheet?

Assets
Liabilities
Owner's Equity
Expenses

Correct Answer

A. Expenses

Explanation

The balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It includes three main components: assets, liabilities, and owner's equity. These components represent what the company owns, owes, and the owner's investment in the business, respectively. Expenses, on the other hand, are not included in the balance sheet. Expenses are recorded in the income statement, which shows the company's revenues, expenses, and net income or loss over a period of time. Therefore, expenses are not a feature of the balance sheet.

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3.

The Trial Balance for a business is:

Another name for a balance sheet
A listing of account balances in a ledger to see if debits equal credits
A statement showing profit for the fiscal year
A check on the bank account balance

Correct Answer

A. A listing of account balances in a ledger to see if debits equal credits

Explanation

The Trial Balance is a listing of account balances in a ledger to see if debits equal credits. It is used to ensure the accuracy of the recorded financial transactions and the overall balance of the accounts. By comparing the total debits and credits, any discrepancies or errors can be identified and corrected before preparing the financial statements. It is not another name for a balance sheet, a statement showing profit for the fiscal year, or a check on the bank account balance.

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4.

Assets are generally listed on a balance sheet in the order of their liquidity. Liquidity means:

The order in which the assets are converted into cash
Their dollar value, with the highest value listed first
Their dollar value, with the lowest value listed first
None of the above

Correct Answer

A. The order in which the assets are converted into cash

Explanation

Liquidity refers to the ease and speed at which an asset can be converted into cash without incurring significant losses. When assets are listed on a balance sheet in the order of their liquidity, it means that the assets that can be easily and quickly converted into cash are listed first, followed by those that may take more time or effort to convert. This ordering helps in assessing the availability of cash and the ability of a company to meet its short-term obligations.

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5.

An Income Statement is:

A listing of the account balances in a ledger
A statement showing the financial position of a person, business or other organization
A financial statement that summarizes the items of revenue and expense, and shows, the net income or net loss of a business for a given period of time
All of the above

Correct Answer

A. A financial statement that summarizes the items of revenue and expense, and shows, the net income or net loss of a business for a given period of time

Explanation

The correct answer is "a financial statement that summarizes the items of revenue and expense, and shows, the net income or net loss of a business for a given period of time." This answer accurately describes an income statement, which is a financial statement that provides a summary of a business's revenues, expenses, and net income or net loss over a specific period. It is used to assess the profitability and financial performance of a business. The other options listed in the question do not accurately describe an income statement.

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6.

The fundamental accounting equation is usually expressed as:

Assets – liability = owner’s equity
Assets = liability – owner’s equity
Assets = liabilities + owners equity
Owner’s equity = assets = liability

Correct Answer

A. Assets = liabilities + owners equity

Explanation

The correct answer is assets = liabilities + owners equity. This equation represents the fundamental accounting equation, which states that the total assets of a company are equal to the sum of its liabilities and owner's equity. This equation is the foundation of double-entry bookkeeping and helps to ensure that the accounting equation remains in balance.

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7.

Which of the following reflects the effects on the accounting equation of a payment to creditors?

Assets decrease: ownership interest decreases
Assets decrease: ownership interest increases.
Assets decrease: liabilities decrease
Assets increase: liabilities decrease

Correct Answer

A. Assets decrease: liabilities decrease

Explanation

When a payment is made to creditors, it reduces the assets of the company because cash is going out. At the same time, the liabilities decrease because the company is paying off its debts. This means that both sides of the accounting equation are affected in the same direction - assets decrease and liabilities decrease. There is no impact on ownership interest in this scenario.

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8.

A credit entry in the accounts would:

Decrease an asset
Increase a liability
Increase the capital account
All of above
B and c only

Correct Answer

A. All of above

Explanation

A credit entry in the accounts would decrease an asset because it represents a decrease in the value of an asset. It would also increase a liability because it represents an increase in the amount owed by the company. Additionally, it would increase the capital account because it represents an increase in the owner's equity or investment in the business. Therefore, all of the options mentioned (a, b, and c) are correct.

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9.

Which of the following reflects the effect on the accounting equation of a purchase of an item of plant and equipment, for cash?

Assets increase: equity decreases
Assets decrease: equity increases
Assets decrease: equity unchanged
Assets unchanged: equity unchanged

Correct Answer

A. Assets unchanged: equity unchanged

Explanation

When an item of plant and equipment is purchased for cash, it means that the company is using its own resources to acquire the asset. As a result, there is no change in the total assets of the company because the cash used to make the purchase is simply converted into the plant and equipment. Similarly, there is no change in equity because the company is not taking on any new liabilities or issuing any new shares. Therefore, both assets and equity remain unchanged in this transaction.

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10.

Owner’s equity is best described as

The difference between the total assets and total liabilities of a business
A portion of total assets that has been bought using the owner’s money
The amount of inventory bought using the owner’s money
None of the above

Correct Answer

A. The difference between the total assets and total liabilities of a business

Explanation

Owner's equity represents the residual interest in the assets of a business after deducting its liabilities. It is the difference between total assets and total liabilities, reflecting the owner's claim on the company's net assets. This equity represents the owner's investment and accumulated earnings in the business.

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Grade 11 Accounting Review Trivia Quiz

Which of the following is not a liability:

Quiz Preview

Which of the following is not a feature of the Balance Sheet?

The Trial Balance for a business is:

Assets are generally listed on a balance sheet in the order of their liquidity. Liquidity means:

An Income Statement is:

The fundamental accounting equation is usually expressed as:

Which of the following reflects the effects on the accounting equation of a payment to creditors?

A credit entry in the accounts would:

Which of the following reflects the effect on the accounting equation of a purchase of an item of plant and equipment, for cash?

Owner’s equity is best described as