Financial Accounting Quiz and Test

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

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

external

internal

Financial statements report the fair market value of a company.

True

False

Large corporations must follow the __________ basis of accounting.

Corporations whose stock is publicly traded must have their financial statements __________ by independent certified public accountants.

The U.S. government agency with authority over the financial reporting requirements of publicly traded corporations is the __________.

AICPA

FASB

IRS

SEC

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

AICPA

FASB

IRS

SEC

The acronym for the common rules and standards that companies must follow when preparing its external financial statements is __________.

SEC is the acronym for __________.

FASB is the acronym for __________.

10.

GAAP is the acronym for __________.

11.

__________-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 __________.

13.

The accounting equation is Assets = __________ + Stockholders' (or Owner's) Equity.

14.

Matching, cost, and full disclosure are examples of the fundamental or basic accounting __________.

15.

The profitability of a company for a specified period of time is reported on the __________ statement.

16.

The main components or elements of the income statement are __________, expenses, gains, and losses.

17.

Prepaid insurance is reported as an __________ on a company's balance sheet.

18.

The word "__________" is often in the title of liability accounts.

19.

The statement of cash flows explains the changes in cash and cash __________ during the specified time interval.

20.

The first section of the statement of cash flows pertains to __________ activities.

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