Accounting Flashcards
7 cards from real FBLA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Accounting flashcards as text
Which financial statement shows a company's revenues and expenses over a specific period?
Answer: Income Statement
The income statement reports revenues and expenses during a defined accounting period to show net income or loss.
Depreciation is best described as:
Answer: The allocation of an asset's cost over its useful life
Depreciation systematically allocates the cost of a long-term tangible asset over its estimated useful life.
When a business collects cash before providing a service, the liability recorded is called:
Answer: Unearned Revenue
Unearned revenue is a liability because the company owes the customer a service or product not yet delivered.
The LIFO inventory method assumes that:
Answer: Newest inventory is sold first
Last-In, First-Out (LIFO) assumes the most recently purchased goods are sold before older inventory.
A trial balance is prepared to verify that:
Answer: Total debits equal total credits in the ledger
A trial balance lists all ledger account balances to confirm that total debits equal total credits.
Which of the following is an example of a long-term liability?
Answer: Mortgage Payable due in 20 years
Long-term liabilities are obligations due more than one year from the balance sheet date, such as a 20-year mortgage.
Gross profit is calculated as:
Answer: Net Sales minus Cost of Goods Sold
Gross profit equals net sales revenue minus the cost of goods sold, before deducting operating expenses.