Better Ledgers Bookkeeping Quiz

1

Name* This field is required.

First Name

Last Name

2

What is double-entry bookkeeping?* This field is required.

Recording transactions twice for verification

Recording each transaction as both a debit and a credit

Keeping duplicate records for all transactions

Using two different accounting methods

3

Which of the following is an example of a liability?* This field is required.

Cash

Inventory

Accounts Payable

Machinery

4

What does the accounting equation state?* This field is required.

Assets = Liabilities - Equity

Assets + Liabilities = Equity

Assets - Liabilities = Equity

Assets = Liabilities + Equity

5

What is the main purpose of a 'Bank Reconciliation Statement'?* This field is required.

To reconcile the differences between the bank's records and the company's records.

To summarize all transactions going through the bank account.

To calculate the total amount of deposits in transit.

To record new transactions not yet recorded by the bank.

6

What is the main purpose of a trial balance?* This field is required.

To calculate net profit

To ensure that all debits and credits are balanced

To summarize all financial transactions

To prepare the income statement

7

How is gross profit calculated?* This field is required.

Total Sales - Cost of Goods Sold

Total Sales - Operating Expenses

Total Revenue - Total Liabilities

Net Sales - Administrative Expenses

8

What does 'depreciation' refer to in accounting?* This field is required.

The division of profits among shareholders

The decrease in value of an asset over time

The increase in asset value due to market conditions

The process of investing in new assets

9

Which financial statement shows a company's financial performance over a specific period?* This field is required.

Balance Sheet

Profit & Loss

Cash Flow Statement

Equity Statement

10

What is 'accounts receivable'?* This field is required.

The cash a company has in the bank

An asset representing money owed to the company

A liability representing money the company owes

A debt owed to the IRS

11

In accrual accounting, how are prepaid expenses treated?* This field is required.

They are recognized as expenses when paid.

They are recorded as assets when paid and expensed over time as they are used.

They are directly expensed in the income statement when paid.

They are not recorded until they are consumed, regardless of payment.

12

Email* This field is required.

example@example.com

13

Phone Number* This field is required.

Please enter a valid phone number.

14

Calculation