BASICS OF ACCOUNTING - SECTION 01 REVIEW QUIZ

What set of "books" should a company keep for accounting purposes?

Incorrect. It's true that a FINANCIAL set of books should be kept, but there are other books that need to be kept for accounting purposes.

Incorrect. It's true that a MANAGERIAL set of books should be kept, but there are other books that need to be kept for accounting purposes.

Incorrect. It's true that an INCOME TAX set of books should be kept, but there are other books that need to be kept for accounting purposes.

Correct! A company should have a FINANCIAL, MANAGERIAL, and an INCOME set of books for accounting purposes.

True or False? Bookkeeping is only important in organizations and not needed in personal finances.

That's incorrect. Bookkeeping is important in both organizations and for personal finances.

Correct! Bookkeeping is important in both organizations and for personal finances.

What does a financial institution need to verify when a person is applying for a loan?

Incorrect. It's true that a financial institution needs to verify income when a person is applying for a loan, but there are other things to verify.

Incorrect. It's true that a financial institution needs to verify a person's assets when one is applying for a loan, but there are other things to verify.

Incorrect. It's true that a financial institution needs to verify financial obligations when a person is applying for a loan, but there are other things to verify.

Correct! When applying for a loan, a financial institution needs to verify income, what things are owned (assets), and all financial obligations (liabilities).