Practice Exercises
Test your accounting knowledge with 30 practice questions across multiple topics
How Practice Exercises Work
- • Choose from 30 exercises covering accounting fundamentals, financial statements, and ratios
- • Practice at your own pace with multiple difficulty levels
- • Get instant feedback with detailed explanations for each answer
- • Use hints if you get stuck (they're there to help!)
- • Track your progress and see which topics you've mastered
What is the fundamental accounting equation?
Which of the following is a current asset?
When a company purchases equipment with cash, what is the effect on the accounting equation?
A company provides services in December but receives payment in January. When should the revenue be recognized?
A company has current assets of $150,000 and current liabilities of $75,000. What is the current ratio?
Which of the following is a liability?
If revenue is $500,000 and cost of goods sold is $300,000, what is the gross profit?
Which of the following is typically considered a non-operating expense?
What happens to retained earnings when a company pays dividends?
A company has total liabilities of $400,000 and total equity of $200,000. What is the debt-to-equity ratio?
Purchasing equipment for cash is classified as which type of cash flow activity?
If net income is $75,000 and revenue is $500,000, what is the net profit margin (as a percentage)?
What is the effect of recording depreciation expense on the financial statements?
A company has current assets of $250,000 and current liabilities of $100,000. What is the working capital?
A company borrows $50,000 from a bank. What accounts are affected?
A company with net income of $100,000 and total assets of $800,000 has an ROA of approximately:
Accrued expenses represent:
Current assets are $300,000 (including inventory of $80,000), and current liabilities are $150,000. What is the quick ratio?
What is the difference between book value and market value?
Why might a profitable company have negative operating cash flow?
Cost of goods sold is $600,000 and average inventory is $75,000. What is the inventory turnover ratio?
Goodwill on a balance sheet typically arises from:
Prepaid expenses are classified as:
Net income is $500,000 and there are 100,000 shares outstanding. What is the basic EPS?
A high accounts receivable turnover ratio indicates:
When a company buys back its own shares (treasury stock), what is the immediate effect?
EBITDA stands for:
Revenue is $1,000,000, cost of goods sold is $600,000. What is the gross margin percentage?
Free Cash Flow is calculated as:
The matching principle states that: