12 Questions
Which financial statement reports a company's assets, liabilities, and shareholders' equity at a specific point in time?
Balance Sheet
What is the purpose of the statement of cash flows?
To present the sources and uses of cash by operating, investing, and financing activities
What is the basic equation for calculating net income?
Net Income = Revenue - Expenses
Which accounting principle assumes that a business will continue to operate indefinitely?
Going Concern Principle
What is the main purpose of the statement of cash flows?
To show the sources and uses of cash during a specific period
Which accounting principle assumes that a business will continue to operate indefinitely?
Going concern principle
What is the basic equation for calculating net income?
Total revenue - Total expenses
Which financial statement reports a company's assets, liabilities, and shareholders' equity at a specific point in time?
Balance sheet
The balance sheet reports a company's financial position at a specific point in time, rather than over a period of time?
True
The statement of cash flows only includes information about cash inflows and outflows from operating activities?
False
The basic accounting equation is Assets = Liabilities + Shareholders' Equity?
True
The accrual accounting principle records revenues and expenses when they are incurred, not necessarily when cash is exchanged?
True
Study Notes
Financial Statements and Accounting Principles
- The balance sheet reports a company's financial position at a specific point in time, rather than over a period of time.
Statement of Cash Flows
- The main purpose of the statement of cash flows is to report a company's cash inflows and outflows over a period of time.
- The statement of cash flows includes information about cash inflows and outflows from operating, investing, and financing activities.
Accounting Principles
- The going concern principle assumes that a business will continue to operate indefinitely.
- The accrual accounting principle records revenues and expenses when they are incurred, not necessarily when cash is exchanged.
Net Income Calculation
- The basic equation for calculating net income is not provided in the text, but it is typically calculated as revenue minus total expenses.
Balance Equation
- The basic accounting equation is Assets = Liabilities + Shareholders' Equity.
Test your knowledge of basic accounting concepts with this quiz for Class 11 students. Questions cover topics like net income calculation, financial statements, statement of cash flows, and accounting principles.
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