Accounting Basics A to Z

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What do assets represent in accounting?

Liabilities of a business

Resources owned by a business with economic value (correct)

Operating expenses of a business

Revenue generated by a business

Which financial statement provides insights into a company's ability to generate cash and its liquidity?

Cash Flow Statement (correct)

Statement of Changes in Equity

Balance Sheet

Income Statement

How is depreciation defined in accounting?

Increase in value of an asset over time

Allocation of an asset's cost over its useful life (correct)

Total revenue generated by an asset

The current market value of an asset

What is included in equity on a balance sheet?

Owner's interest after deducting liabilities Signup and view all the answers

Which set of standards provide a common framework for financial reporting?

Generally Accepted Accounting Principles (GAAP) Signup and view all the answers

What is the principle that states assets should be recorded at their original cost when acquired?

Historical Cost Signup and view all the answers

Which of the following is a measure of a company's ability to meet short-term obligations with liquid assets?

Quick Ratio Signup and view all the answers

What does the term 'Journal Entry' refer to in accounting?

A financial transaction recorded in the accounting system Signup and view all the answers

What is the principle that states expenses should be recorded in the same period as related revenues?

Matching Principle Signup and view all the answers

Which of the following represents the claims against a company's assets by external parties?

Liabilities Signup and view all the answers

Accounting Basics A to Z

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Questions and Answers

What do assets represent in accounting?

Which financial statement provides insights into a company's ability to generate cash and its liquidity?

How is depreciation defined in accounting?

What is included in equity on a balance sheet?

Which set of standards provide a common framework for financial reporting?

What is the principle that states assets should be recorded at their original cost when acquired?

Which of the following is a measure of a company's ability to meet short-term obligations with liquid assets?

What does the term 'Journal Entry' refer to in accounting?

What is the principle that states expenses should be recorded in the same period as related revenues?

Which of the following represents the claims against a company's assets by external parties?

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