Wyrnkaa - Chapter 3 Review Questions
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What are the three sections of the Balance Sheet?
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Assets, Expenses, and Equity
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Assets, Equity, and Net Cash
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Assets, Accounts Payable, and Retained Earnings
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Assets, Liabilities, and Equity
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This quiz will test your understanding of the material covered in the third chapter of "What You Really Need to Know About Accounting". Visit https://www. Notforaccountants. Com/learning-tools. Php for more quizzes.
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- 2.
What is an Asset, in simple terms?
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Something your business owns
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Something your business owes
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Both a & b
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Neither a nor b
Correct Answer
A. Something your business ownsExplanation
Assets are what a business OWNS. What a business OWES is a liability.Rate this question:
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- 3.
The Income Statement is made up primarily of:
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Cash and Expenses
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Revenue and Expenses
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Gains and Expenses
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Losses and Expenses
Correct Answer
A. Revenue and ExpensesExplanation
The Income Statement is made up primarily of Revenues and Expenses. The Income Statement can also include Gains and Losses, but the primary categories are Revenues and Expenses.Rate this question:
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- 4.
Net Income is shown on the:
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Balance Sheet
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Income Statement
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Net Cash Statement
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Net Accrual Statement
Correct Answer
A. Income StatementExplanation
Revenues, Expenses, and Net Income are shown on the Income Statement.Rate this question:
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- 5.
The "statement of what you've earned" is the:
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Balance Sheet
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Income Statement
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Statement of Cash Flows
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Statement of Retained Earnings
Correct Answer
A. Income StatementExplanation
The Income Statement can be considered a statement of what you've earned because it shows your revenue, expenses, and net income/earnings over a period of time.Rate this question:
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- 6.
Accrual basis accounting seeks to match:
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Revenues with the Expenses used to generate those Revenues
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Cash inflows with Cash outflows
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Revenues with Cash inflows
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Expenses with Cash Outflows
Correct Answer
A. Revenues with the Expenses used to generate those RevenuesExplanation
Accrual basis accounting seeks to match revenues with the expenses used to generate those revenues. This means that revenues are recognized when they are earned, regardless of when the cash is received, and expenses are recognized when they are incurred, regardless of when the cash is paid out. This method provides a more accurate representation of a company's financial performance and allows for better decision-making based on the matching principle.Rate this question:
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- 7.
The Statement of Cash Flows shows:
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How much operating income a business has earned
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How well a business is managing its overhead
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How a business generated and used cash
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How many assets a business has
Correct Answer
A. How a business generated and used cashExplanation
The statement of cash flows is concerned with how a company generated and used cash during a given period.Rate this question:
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- 8.
The Statement of Cash Flows shows cash from:
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Current Activities, Discontinued Activities, and Future Activities
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Primary Activities, Secondary Activities, and Discontinued Activities
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Financing Activities, Net Income, and Net Liabilities
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Operating Activities, Investing Activities, and Financing Activities
Correct Answer
A. Operating Activities, Investing Activities, and Financing ActivitiesExplanation
The three sections of a cash flow statement are Cash from Operating Activities, Cash from Investing Activities, and Cash from Financing Activities.Rate this question:
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- 9.
The "statement of what you've got" is the:
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Balance Sheet
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Income Statement
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Statement of Cash Flows
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Statement of Retained Earnings
Correct Answer
A. Balance SheetExplanation
The Balance Sheet can be considered a statement of what you've got because it shows what your company owns (assets), owes (liabilities), and the net value to the owners (equity).Rate this question:
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- 10.
The Income Statement and Balance Sheet utilize:
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The Cash basis of accounting
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The Net Receipts basis of accounting
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The Gross Income basis of accounting
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The Accrual basis of accounting
Correct Answer
A. The Accrual basis of accountingExplanation
The accrual basis of accounting is required by GAAP in most cases.Rate this question:
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Feb 05, 2024Quiz Edited by
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Mar 26, 2011Quiz Created by
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