Accounting EquationEasy
Which equation is fundamental to the balance sheet?
A.Assets = Liabilities + Equity
B.Revenue = Assets + Cash
C.Profit = Equity + Debt
D.Cash = Revenue - Assets
Assets are financed by liabilities and owners' equity.
Finance Fundamentals Test
Assess knowledge of accounting principles, financial statements, valuation basics and commercial calculations.
45 minMedium20 questions18 sections
Accounting fundamentalsFinancial statementsValuation basicsFinancial calculations
Topics covered
Accounting EquationFinancial StatementsRevenue RecognitionGross MarginOperating ProfitWorking CapitalReceivablesPayablesDepreciationBreak-evenContribution MarginROITime ValueNPVLiquidity RatiosLeverageVarianceAnalysis
Sample questions
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Financial StatementsEasy
A balance sheet shows:
A.Financial position at a point in time
B.Revenue and expenses only over a period
C.Only cash receipts
D.Future forecasts
It reports assets, liabilities and equity at a date.
Revenue RecognitionMedium
A customer pays annually in advance. Why might the full cash receipt not be recognised as revenue immediately?
A.Revenue may be recognised as the service is delivered
B.Cash can never be revenue
C.Annual payments are liabilities forever
D.Accounting ignores contracts
Accrual accounting matches revenue to delivery or performance obligations.
Gross MarginMedium
Revenue is $500,000 and cost of goods sold is $300,000. What is gross margin percentage?
A.20%
B.40%
C.60%
D.66.7%
Gross profit is 200,000; 200,000 ÷ 500,000 = 40%.
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