Fundamental Accounting Concepts Quiz

The Double Entry system of Accounting is a method of recording financial transactions where every transaction has equal and opposite effects in at least two different accounts. For example, when a company makes a sale, it records the revenue from the sale as well as the increase in accounts receivable.

Management Accounting is the process of analyzing and presenting financial information for internal use by management to aid in decision-making. It is related to Financial Accounting in that it uses financial data from the Financial Accounting system to provide information for managerial decision-making.

A Trial Balance is a list of all the general ledger accounts contained in the ledger of a business. It shows the balances of the debit and credit sides of each account to ensure that the total debits equal the total credits, which helps in identifying errors or discrepancies.