Bookkeeping Certification — Practice Exam
Financial statements: practice questions
Our Bookkeeping bank has 11 questions on this topic. Here are 5 of them with answers; the full mock exam draws from every topic, like the real one.
Question 1
Revenues are $50,000 and expenses are $35,000. What is net income?
- $35,000
- $50,000
- $15,000
- $85,000
Show the answer
C. $15,000 — $50,000 − $35,000.
Question 2
What are closing entries for?
- Transferring temporary account balances (revenue, expense, drawings) to equity at period end
- Closing the bank account
- Paying final bills
- Recording adjustments
Show the answer
A. Transferring temporary account balances (revenue, expense, drawings) to equity at period end — Temporary accounts start the new period at zero.
Question 3
Which statement shows a company's financial position at a specific date?
- The income statement
- The balance sheet
- The trial balance
- The statement of cash flows
Show the answer
B. The balance sheet — It lists assets, liabilities and equity.
Question 4
Current assets are $60,000 and current liabilities are $30,000. What is the current ratio?
- 0.5
- 2.0
- 30,000
- 90,000
Show the answer
B. 2.0 — $60,000 ÷ $30,000.
Question 5
What are current assets?
- Assets expected to be converted to cash or used up within one year
- Assets held more than a year
- Buildings and land
- Only cash
Show the answer
A. Assets expected to be converted to cash or used up within one year — Examples: cash, receivables, inventory, prepaid expenses.