Core Financial Accounting Flashcards
6 cards from real IKM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Core Financial Accounting flashcards as text
Which financial statement reports revenues and expenses over a period?
Answer: Income Statement
The Income Statement summarizes revenues, expenses, and profits over a reporting period.
What is the accounting equation?
Answer: Assets = Liabilities + Equity
Assets equal Liabilities plus Equity, the basis for double-entry bookkeeping.
Under accrual accounting, when is revenue recognized?
Answer: When goods or services are delivered
Under ASC 606, revenue is recognized when the performance obligation is satisfied.
What does GAAP stand for?
Answer: Generally Accepted Accounting Principles
GAAP is the set of accounting standards used for U.S. financial reporting.
Which depreciation method allocates an equal amount each year?
Answer: Straight-line
Straight-line divides the depreciable amount equally across the asset's useful life.
What is the purpose of a trial balance?
Answer: Verify total debits equal total credits
A trial balance lists all ledger account balances to verify debits equal credits.