Which of the following is not a basic accounting principle?
Correct!
Wrong :(
Answer - d) Fiscal Responsibility Principle
2
The accounting equation is:
Correct!
Wrong :(
Answer - d) Assets = Liabilities + Owners Equity
3
Which accounting principle requires that financial information be recorded and reported at regular intervals?
Correct!
Wrong :(
Answer - a) Time Period Principle
4
An expense that has been incurred but not yet paid is called:
Correct!
Wrong :(
Answer - a) Accrued Expense
5
Which financial statement reports a companys financial position at a specific point in time?
Correct!
Wrong :(
Answer - c) Balance Sheet
6
What is the purpose of the Generally Accepted Accounting Principles (GAAP)?
Correct!
Wrong :(
Answer - c) To provide a framework for consistent and reliable financial reporting
7
Which accounting method records revenue only when its earned and expenses only when they are incurred?
Correct!
Wrong :(
Answer - b) Accrual Basis Accounting
8
Which financial statement reports the revenues and expenses of a company over a specific period?
Correct!
Wrong :(
Answer - c) Income Statement
9
Which of the following is an asset?
Correct!
Wrong :(
Answer - c) Inventory
10
The recording of financial transactions in two or more accounts is known as:
Correct!
Wrong :(
Answer - d) Double-Entry Accounting
11
Which accounting principle requires that accounting records and methods remain consistent from one accounting period to another?
Correct!
Wrong :(
Answer - b) Consistency Principle
12
The process of allocating the cost of a long-term asset over its useful life is called:
Correct!
Wrong :(
Answer - a) Depreciation
13
Which financial statement shows how a companys cash position changed over a specific period?
Correct!
Wrong :(
Answer - c) Statement of Cash Flows
14
When revenue is recognized before it is received in cash, it results in:
Correct!
Wrong :(
Answer - c) An increase in equity
15
Which accounting principle suggests that you should record expenses when they are incurred and not when they are paid?
Correct!
Wrong :(
Answer - d) Accrual Principle
16
The document used to record a sale of goods or services on credit is called a:
Correct!
Wrong :(
Answer - b) Sales Invoice
17
Which financial statement is also known as the statement of shareholders equity?
Correct!
Wrong :(
Answer - d) Statement of Retained Earnings
18
What is the purpose of the Cost Principle in accounting?
Correct!
Wrong :(
Answer - b) To record the cost of an asset as its historical cost
19
Which financial statement shows the companys revenues, expenses, and net income or loss over a specific period?
Correct!
Wrong :(
Answer - c) Income Statement
20
What is the purpose of the Going Concern Principle in accounting?
Correct!
Wrong :(
Answer - b) To assume that a company will continue to operate for the foreseeable future
21
Which of the following accounts represents owners equity?
Correct!
Wrong :(
Answer - c) Common Stock
22
What is the primary purpose of the Statement of Cash Flows?
Correct!
Wrong :(
Answer - c) To show how the companys cash position changed over a period
23
When a company records an accrued revenue, which account is debited?
Correct!
Wrong :(
Answer - c) Accounts Receivable
24
Which financial statement is prepared first in the accounting cycle?
Correct!
Wrong :(
Answer - d) Trial Balance
25
What is the formula for calculating Net Income on an Income Statement?
Correct!
Wrong :(
Answer - b) Net Income = Total Revenue - Total Expenses
26
Under the cash basis of accounting, when is revenue recognized?
Correct!
Wrong :(
Answer - b) When it is collected in cash
27
Which of the following is an example of a contra account?
Correct!
Wrong :(
Answer - c) Accumulated Depreciation
28
What is the purpose of the Materiality Principle in accounting?
Correct!
Wrong :(
Answer - c) To only report significant information that may influence users decisions
29
Which financial statement provides details about the changes in owners equity over a period?
Correct!
Wrong :(
Answer - d) Statement of Retained Earnings
30
What is the purpose of the Conservatism Principle in accounting?
Correct!
Wrong :(
Answer - b) To understate assets and overstate liabilities
31
Which accounting principle requires that expenses should be recognized in the same period as the revenues they help to generate?
Correct!
Wrong :(
Answer - b) Matching Principle
32
What is the purpose of the Revenue Recognition Principle in accounting?
Correct!
Wrong :(
Answer - b) To recognize revenue when it is earned and realisable
33
Which of the following financial statements is typically prepared last in the accounting cycle?
Correct!
Wrong :(
Answer - b) Balance Sheet
34
When a company receives cash in advance from a customer for services to be provided in the future, it records this as:
Correct!
Wrong :(
Answer - c) Unearned Revenue
35
Which accounting principle suggests that financial information should be recorded at historical cost rather than market value?
Correct!
Wrong :(
Answer - d) Cost Principle
36
Which financial statement reports the changes in cash flows from operating, investing, and financing activities?
Correct!
Wrong :(
Answer - c) Statement of Cash Flows
37
Which of the following is a liability?
Correct!
Wrong :(
Answer - c) Long-Term Debt
38
What is the purpose of the Accrual Principle in accounting?
Correct!
Wrong :(
Answer - b) To record expenses when they are incurred, regardless of when cash is paid
39
Which financial statement reports the financial performance of a company over a specific period?
Correct!
Wrong :(
Answer - b) Income Statement
40
Under the accrual basis of accounting, when is revenue recognized?
Correct!
Wrong :(
Answer - a) When it is earned
41
Which of the following is an example of an intangible asset?
Correct!
Wrong :(
Answer - c) Patents
42
Which financial statement reports the companys financial position at a specific point in time?
Correct!
Wrong :(
Answer - c) Balance Sheet
43
What is the purpose of the Consistency Principle in accounting?
Correct!
Wrong :(
Answer - d) To use the same accounting methods and principles from one period to another
44
Which accounting principle suggests that you should record revenue when it is collected in cash?
Correct!
Wrong :(
Answer - c) Revenue Recognition Principle
45
When a company records an accrued expense, which account is debited?
Correct!
Wrong :(
Answer - a) Expense
46
What is the purpose of the Time Period Principle in accounting?
Correct!
Wrong :(
Answer - b) To match expenses with related revenues
47
Which financial statement is used to reconcile the beginning and ending balances of a companys retained earnings?
Correct!
Wrong :(
Answer - d) Statement of Retained Earnings
48
The purchase of inventory on credit would result in which of the following journal entries?
Correct!
Wrong :(
Answer - b) Debit Accounts Payable, Credit Inventory
49
Which financial statement provides a summary of a companys assets, liabilities, and equity at a specific date?
Correct!
Wrong :(
Answer - c) Balance Sheet
50
What is the purpose of the Full Disclosure Principle in accounting?
Correct!
Wrong :(
Answer - a) To disclose all relevant financial information to external users
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Question. What is/Introduction of Principles of Accounting
Answer. Principles of accounting can also refer to the basic or fundamental principles of accounting: cost principle, matching principle, full disclosure principle, revenue recognition principle, going concern assumption, economic entity assumption, and so on. In this context, principles of accounting refers to the broad underlying concepts which guide accountants when preparing financial statements.