Lesson 17 Quiz:

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Question 1 of 6

1. Question
What is double-entry bookkeeping?
- a. Recording entries twice to “cook the books.”
- b. A system of debits and credits.
- c. Bookkeeping used by employees who embezzle money.
- d. Amounts recorded on the left side of the ledger must equal amounts on the right side of the ledger.
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Question 2 of 6

2. Question
What is a true statement about a profit and loss statement?
- a. Assets and debts are included on the profit and loss statement.
- b. Categorizing individual bank transactions is not important because the statement’s main purpose is to illustrate whether there is a profit or a loss.
- c. The profit and loss statement can be used to compare profits and losses to prior time periods.
- d. The profit and loss statement is an important tool to assess the profitability of a business.
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Question 3 of 6

3. Question
What type of professional would generally assist a business with bookkeeping?
- a. CPA – Certified Public Accountant
- b. EA – Enrolled Agent
- c. CB – Certified Bookkeeper
- d. CFP® Professional – CERTIFIED FINANCIAL PLANNER(TM) Professional
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Question 4 of 6

4. Question
What is the primary purpose of auditing business financial books?
- a. Confirm that money was spent as stated in the bookkeeping reports.
- b. Identify employee theft and fraud.
- c. Provide accurate financial reporting to third-parties, such as regulatory agencies.
- d. Discover errors in tax returns filed by the business.
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Question 5 of 6

5. Question
How is a cash flow statement used in business bookkeeping?
- a. Compare actual income and expenses against the budget.
- b. Report on the movement of cash by activity.
- c. Report on the profit or loss by time period.
- d. It is a substitute for the check register.
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Question 6 of 6

6. Question
What best describes depreciation?
- a. Both tax regulation and bookkeeping principles govern depreciation.
- b. It is the systematic reduction of the value of assets over time to reflect the asset’s remaining life expectancy.
- c. It is a system of recording expenses for the purchase of assets which would otherwise only be listed on the balance sheet.
- d. Depreciation must begin occurring in the year the asset was purchased.
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Lesson 17 Quiz:

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