Accounting quiz

More questions about Accounting

These visible examples show the question style. LearnClash turns the full topic into ranked duels and spaced repetition.

1. 1 Easy

   What acronym names the rules governing US financial accounting?

   Answer: GAAP

   Why: GAAP stands for Generally Accepted Accounting Principles and is set by FASB.

2. 2 Medium

   What accounting term describes paying more for a business than its net assets?

   Answer: Goodwill

   Why: Under IFRS, goodwill has not been amortized since 2005; it is only tested for impairment.

3. 3 Hard

   When is the intangible asset known as 'Goodwill' first recorded?

   Answer: During an acquisition

   Why: A firm cannot book goodwill it grew itself; only a purchase creates it; AOL Time Warner then wrote off about $99 billion of it in 2002.

4. 4 Easy

   Where does an accountant record all of a company's financial accounts?

   Answer: General ledger

   Why: Luca Pacioli's 1494 bookkeeping treatise named three books: memorandum, journal, and the ledger where every entry lands.

5. 5 Medium

   Which inventory system continuously updates balance records after every sale?

   Answer: Perpetual

   Why: Barcode scans update the books instantly, yet shops still count the shelves, because theft and damage make the recorded figure drift from reality.

6. 6 Hard

   Which inventory method reports the highest net income during inflation?

   Answer: First-in first-out

   Why: LIFO, its mirror image, has been barred by IAS 2 since its 2003 revision; US firms using it for tax must use it in their accounts too.