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 accounting principle requires that expenses be recorded in the same period as the revenues they helped generate?
Answer: Matching Principle
The matching principle dictates that expenses must be recorded in the period associated with the revenues they helped produce.
A company's current ratio is calculated by dividing:
Answer: Current Assets by Current Liabilities
The current ratio measures short-term liquidity by comparing current assets to current liabilities.
Which entry correctly records a $500 cash sale under double-entry bookkeeping?
Answer: Debit Cash $500; Credit Revenue $500
A cash sale increases both Cash (debit) and Revenue (credit) by $500, following the double-entry system.
The concept of 'going concern' assumes that:
Answer: A business will continue to operate indefinitely into the future
The going concern assumption holds that a company will remain in operation long enough to fulfill its obligations and plans.
Which account would be found on the balance sheet?
Answer: Retained Earnings
Retained earnings is an equity account that appears on the balance sheet, representing accumulated net income not distributed as dividends.
A petty cash fund is established primarily to:
Answer: Pay small, miscellaneous business expenses conveniently
Petty cash funds are maintained for small, routine expenses that are impractical to pay by check or electronic transfer.
Under accrual accounting, revenue is recognized when:
Answer: It is earned, regardless of when cash is collected
Accrual accounting recognizes revenue when it is earned (goods delivered or services rendered), not necessarily when payment is received.