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 of the following best describes 'owner's equity' in a sole proprietorship?
Answer: Total assets minus total liabilities
Owner's equity represents the residual interest in the assets of the business after deducting all liabilities.
Which inventory costing method results in the highest net income during a period of rising prices?
Answer: FIFO
FIFO assigns lower (older) costs to cost of goods sold during rising prices, resulting in higher gross profit and net income.
An adjusting entry for accrued salaries would include:
Answer: Debit Salaries Expense; Credit Salaries Payable
Accrued salaries are recorded by debiting Salaries Expense and crediting Salaries Payable to recognize the obligation.
The debt-to-equity ratio is used to measure a company's:
Answer: Financial leverage and use of debt financing
The debt-to-equity ratio compares total liabilities to shareholders' equity, indicating how much debt is used relative to equity.
Which of the following is NOT one of the four financial statements?
Answer: General Ledger
The general ledger is an accounting record, not one of the four primary financial statements.
A bank reconciliation is performed to:
Answer: Match the company's cash records with the bank statement
A bank reconciliation reconciles differences between the company's cash book balance and the bank statement balance.
Accounts receivable represents:
Answer: Money owed to the business by customers for credit sales
Accounts receivable is an asset reflecting amounts owed by customers who purchased goods or services on credit.