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Multiple Choice Quiz
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1
The process of collecting financial data, organizing and analyzing it using agreed upon rules and methods, and reporting the results in financial statements is best referred to as ___________.
A)financial management
B)an accounting system
C)bookkeeping
D)accounting
2
The record-keeping activities needed to monitor and track all of the financial transactions related to making and selling goods and services is known as ______.
A)bookkeeping
B)financial management
C)the accounting system
D)accounting
3
When accountants calculate the reduced value of an organization's assets, they are actually calculating the __________ value of the assets.
A)appreciated
B)estimated
C)depreciated
D)sales revenue
4
Mark has taken over 150 semester hours of accounting courses. He recently received notification he passed his latest higher-level exam. Passing this important exam afforded him the necessary credentials to perform audits. Mark is most likely a/an _________.
A)financial accountant
B)CPA
C)accounting expert
D)financial manager
5
A/An _______ is the formal evaluation of the fairness and reliability of a company's financial statements.
A)audit
B)GAAP
C)ERP
D)accounting system
6
The financial obligations of a company incurred by borrowing money or buying productive resources on credit are best referred to as the company's _______.
A)assets
B)balance sheet
C)stockholders' equity
D)liabilities
7
The total capital invested in a company over time as well as the past profits it has retained in its business is known as ___________.
A)liabilities
B)assets
C)stockholders' equity
D)the accounting system
8
The basic accounting equation is best represented by which one of the following?
A)Liabilities + Assets = Owners' Equity
B)Liabilities - Assets = Owners' Equity
C)Assets - Liabilities = Owners' Equity
D)Owners' Equity + Liabilities = Assets
9
A method of recording the dual effects of a business's financial transactions so that the company's assets, liabilities, and owners' equity are always in balance is called ________.
A)the accounting system
B)double-entry bookkeeping
C)financial management
D)auditing
10
An accounting rule that requires the expenses incurred to make and sell products be deducted from the revenues generated by their sale during the same accounting period is known as ________.
A)GAAP
B)the accrual basis of accounting
C)double-entry bookkeeping
D)the matching principle





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