Which of the following is classified as a current asset?
a) Land
b) Accounts Receivable
c) Equipment
d) Trademark
Which of the following is an example of an intangible asset?
a) Inventory
b) Patents
c) Cash
d) Accounts Payable
Liabilities are classified as:
a) Current and fixed liabilities
b) Short-term and non-current liabilities
c) Equity and revenue liabilities
d) Liquid and non-liquid liabilities
Which of the following is NOT considered a fixed asset?
a) Office Furniture
b) Building
c) Cash
d) Machinery
Which financial statement reports assets and liabilities?
a) Income Statement
b) Balance Sheet
c) Statement of Retained Earnings
d) Cash Flow Statement
Which of the following is a long-term liability?
a) Accounts Payable
b) Short-term Loan
c) Mortgage Payable
d) Salaries Payable
Current liabilities are obligations that must be settled within:
a) 6 months
b) 12 months
c) 2 years
d) 5 years
Which of the following is NOT a liability?
a) Notes Payable
b) Accounts Receivable
c) Bank Loan
d) Wages Payable
How are fixed assets recorded on the balance sheet?
a) At market value
b) At historical cost minus depreciation
c) At fair value
d) At estimated resale value
A contingent liability is:
a) A guaranteed liability
b) A possible liability depending on future events
c) An asset in disguise
d) A fixed liability
Which of the following assets is subject to depreciation?
a) Land
b) Cash
c) Buildings
d) Goodwill
Goodwill is recorded as an asset when:
a) A business generates excess revenue
b) A company acquires another company for more than its net asset value
c) A company invests in stocks
d) A company issues dividends
Which of the following is NOT a tangible asset?
a) Vehicles
b) Land
c) Trademark
d) Inventory
How is accumulated depreciation reported on the balance sheet?
a) As a current liability
b) As an intangible asset
c) As a reduction from fixed assets
d) As a non-current liability
Which of the following accounts is NOT considered a liability?
a) Unearned Revenue
b) Accounts Payable
c) Prepaid Expenses
d) Bonds Payable
Which type of liability arises from borrowing funds from a bank?
a) Accounts Payable
b) Bank Loan Payable
c) Unearned Revenue
d) Accrued Wages
Which of the following is classified as a current liability?
a) Long-term Debt
b) Bank Overdraft
c) Patents
d) Equipment
What happens when a company pays off a liability?
a) Assets decrease, liabilities decrease
b) Liabilities increase, equity increases
c) Assets increase, liabilities increase
d) Equity decreases, assets increase
Which accounting principle is followed when assets are recorded at cost?
a) Matching Principle
b) Revenue Recognition Principle
c) Historical Cost Principle
d) Prudence Principle
Which of the following assets is amortized instead of depreciated?
a) Buildings
b) Machinery
c) Copyrights
d) Land
Which asset is NOT subject to depreciation or amortization?
a) Equipment
b) Land
c) Patent
d) Software
Liabilities are usually settled by:
a) Issuing stock
b) Paying cash or transferring assets
c) Increasing revenue
d) Selling property
The quick ratio measures:
a) The ability to pay short-term liabilities using liquid assets
b) The overall profitability of the company
c) The long-term solvency of the company
d) The total revenue growth
Accounts Payable represents:
a) Cash payments made to suppliers
b) The amount owed to suppliers for goods and services
c) Revenue earned from customers
d) Money collected from clients
Which type of liability arises from receiving payment before delivering goods or services?
a) Accounts Payable
b) Unearned Revenue
c) Notes Payable
d) Accrued Wages
Depreciation expense affects which financial statement?
a) Balance Sheet only
b) Cash Flow Statement only
c) Income Statement and Balance Sheet
d) Income Statement only
