Book Keeping Test Questions with Correct Answers
What is a liability? - Answer-Obligations of a company or organization. Amounts owed to lenders and suppliers
What is a current liability? - Answer-Debt that can be paid within one year or accounting period.
How long is one accounting perio...
Book Keeping Test Questions with
Correct Answers
What is a liability? - Answer-Obligations of a company or organization. Amounts owed
to lenders and suppliers
What is a current liability? - Answer-Debt that can be paid within one year or accounting
period.
How long is one accounting period? - Answer-Typically one year
Examples of Liabilities:
A. Payable, Unearned Revenues, Notes (bank loans)
B. Cash, Payable, Notes (bank loans)
C. Payable, Revenue, Expenses - Answer-A
examples of current liabilities - Answer-accounts payable, salaries and wages payable,
notes payable, interest payable, and income taxes payable
When do debits have to equal credits - Answer-All the time
Income Statement Equation - Answer-Revenues - Expenses = Net Income or Net Loss
When is there a Net Income - Answer-When Revenue is greater than Expenses
When is there a Net Loss - Answer-When Expenses are greater than Revenue
What is an operating activity? - Answer-are the functions of a business directly related
to providing its goods and/or services to the market.
examples of operating activities - Answer-Cash inflows: from sale of goods or services;
Cash outflows: to suppliers for inventory, to employees for services, to government for
taxes, to lenders for interest
What are investing activities? - Answer-the purchase or sale of the resources a
company needs in order to operate
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