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Financial Accounting (Practice Quiz)

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Author:
Harold Averkamp, CPA, MBA

For multiple-choice and true/false questions, simply press or click on what you think is the correct answer. For fill-in-the-blank questions, press or click on the blank space provided.

If you have difficulty answering the following questions, learn more about this topic by reading our Financial Accounting (Explanation).


1.
Financial accounting is focused on the __________ financial statements of a company.

External

Right!

Internal

Wrong.
2.
Financial statements report the fair market value of a company.

True

Wrong.

False

Right!
3.
Large corporations must follow the __________ accrual basis of accounting.
4.
Corporations whose stock is publicly traded must have their financial statements __________ audited by independent certified public accountants.
5.
The U.S. government agency with authority over the financial reporting requirements of publicly traded corporations is the __________.

AICPA

Wrong.
The AICPA is not a government agency.

FASB

Wrong.
The FASB is not a government agency.

IRS

Wrong.
This government agency is associated with income tax reporting.

SEC

Right!
6.
The non-government organization that researches and develops new accounting standards is the __________.

AICPA

Wrong.

FASB

Right!

IRS

Wrong.
This is a government agency.

SEC

Wrong.
This is a government agency.
7.
The acronym for the common rules and standards that companies must follow when preparing its external financial statements is __________ GAAP.
8.
SEC is the acronym for __________ Securities and Exchange Commission.
9.
FASB is the acronym for __________ Financial Accounting Standards Board.
10.
GAAP is the acronym for __________ generally accepted accounting principles.
11.
__________ Double-entry bookkeeping will result in at least two accounts being involved in every transaction.
12.
Every transaction will have one account being credited and one account being __________ debited.
13.
The accounting equation is Assets = __________ Liabilities + Stockholders' (or Owner's) Equity.
14.
Matching, cost, and full disclosure are examples of the fundamental or basic accounting __________ principles.
15.
The profitability of a company for a specified period of time is reported on the __________ income statement.
16.
The main components or elements of the income statement are __________ revenues, expenses, gains, and losses.
17.
Prepaid insurance is reported as an __________ asset on a company's balance sheet.
18.
The word "__________ payable" is often in the title of liability accounts.
19.
The statement of cash flows explains the changes in cash and cash __________ equivalents during the specified time interval.
20.
The first section of the statement of cash flows pertains to __________ operating activities.
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About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.

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