ESSENTIAL ACCOUNTANCY TERMS Quiz Page 1

1. What is a balance sheet?

A) A list of monthly expenses
B) A financial statement showing assets, liabilities and equity
C) A record of daily sales
D) A bank statement

2. What is profit?

A) Money left after subtracting expenses from revenue
B) Total money earned from sales
C) Money spent on business operations
D) Money borrowed from the bank

3. Which term means income from sales before expenses?

A) Profit
B) Tax
C) Revenue
D) Budget

4. What are expenses?

A) Money earned from investments
B) Profit from sales
C) Money in the bank
D) Costs incurred in business operations

5. What is an asset?

A) A resource owned by a business
B) Money owed to others
C) Monthly expenses
D) Business taxes

6. What is a liability?

A) Business profit
B) Debt or financial obligation
C) Company revenue
D) Business asset

7. What is a ledger used for?

A) Storing cash
B) Writing checks
C) Recording financial transactions
D) Paying employees

8. What is an invoice?

A) A bill for goods or services
B) A type of tax
C) A bank statement
D) A profit report

9. What is an audit?

A) A business plan
B) A sales report
C) A tax payment
D) An official examination of accounts

10. What is a budget?

A) Last year's profit
B) A financial plan for a future period
C) Current bank balance
D) Monthly revenue

11. What is tax in business terms?

A) Money paid to employees
B) Business profit
C) Mandatory financial charge by government
D) Company assets

12. What is payroll?

A) Total wages paid to employees
B) Business expenses
C) Company profit
D) Tax payments

13. What is a dividend?

A) Business expense
B) Bank loan
C) Tax payment
D) Profit share paid to shareholders

14. What is depreciation?

A) Increase in profit
B) Reduction in asset value over time
C) Growth in revenue
D) Rise in expenses

15. Which financial document shows a company's assets and liabilities?

A) Tax return
B) Invoice
C) Balance sheet
D) Payroll record