Accounting Basics Quiz

Accounting Basics

• The left side of a standard account is known as the debit side.
• The right side of a standard account is known as the credit side.

Demographics

• Demographics refer to the characteristics of a population, such as age, gender, and income level.
• Demographics study the characteristics of a population, including age, gender, and income level.

Depreciation

• Depreciation is the decrease in value of an asset over time.
• Depreciation is a result of the wear and tear of an asset.

Drawing Account

• A drawing account is a record of withdrawals made by the owner of a business.
• Withdrawals made by the owner of a business are recorded in a drawing account.

Earnings Valuation Approach

• The earnings valuation approach focuses on the earnings of a company.
• The earnings valuation approach estimates the value of a company based on its earnings.

Accounting Equation

• The accounting equation is Assets = Liabilities + Equity.

Accounts Payable

• Accounts payable refer to the amount of money a business owes to its suppliers.

Accrual Accounting

• The purpose of accrual accounting is to match revenues with the expenses incurred to generate them.
• Accrual accounting is used to recognize revenues and expenses when they are earned, regardless of when payment is received.

Accrued Expenses and Income

• Accrued expense is an expense that has been incurred but not yet paid.
• Accrued income is revenue that has been earned but not yet received.

Acquisition

• Acquisition refers to the process of one company buying another company.

Advertising

• The purpose of advertising in business is to promote products or services to potential customers.

Age of Accounts Receivable and Inventory

• The age of accounts receivable measures the average time it takes for a business to collect its debts.
• The age of inventory measures the average time it takes for a business to sell its inventory.

Age Discrimination in Employment Act

• The Age Discrimination in Employment Act requires employers to treat employees of all ages fairly.

Financial Statements

• A balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time.
• A break-even analysis is a calculation that determines the point at which a business's revenue equals its expenses.
• A cash flow statement is a financial statement that shows the inflows and outflows of cash over a specific period.
• Branding refers to the process of creating a unique identity for a business or product.

Business and Insurance

• A business plan is a document that outlines the goals and objectives of a business.
• Business interruption insurance is a type of insurance that provides coverage for a business that is forced to close due to unforeseen circumstances.
• Cash basis accounting is a method of accounting that recognizes revenues and expenses when payment is received or made.
• Casualty insurance is a type of insurance that provides coverage for accidental losses or damages.
• Closed end credit is a type of loan that has a fixed amount and a fixed repayment period.
• Controlling (evaluating) is the process of monitoring and correcting the performance of a business.

Test your knowledge of accounting basics with this quiz! From understanding the accounting equation to identifying accounts payable, this quiz will challenge your understanding of key concepts in the language of business.