Income Statement quiz level 1 Financial Statements Quiz Share Income Statement quiz level 1 Income Statement quiz level 2 Income Statement level 1 Pass Score 70% The questions change when you repeat the exam 1 / 25 Which item is non-operating ? Interest income Salaries Office rent Sales revenue 2 / 25 Operating income is calculated as: Net income − tax Gross profit − operating expenses Revenue − COGS Revenue − tax It shows profit from core operations. 3 / 25 The income statement covers: Only one day A period of time A future period A specific point in time It summarizes performance over a month, quarter, or year. 4 / 25 Net income is : Revenue Operating income Profit after all expenses Gross profit It’s the “bottom line.” 5 / 25 Selling expenses include: Raw materials Sales commissions Inventory Factory rent Selling expenses support sales activity. 6 / 25 Gross margin is : Expenses ÷ Revenue Gross profit ÷ Revenue Net income ÷ Assets Revenue ÷ COGS It measures production efficiency. 7 / 25 Freight-out is : Selling expense Other expense COGS Administrative expense 8 / 25 Gross profit equals : Revenue − COGS Revenue − Expenses Net income + tax Operating income − tax Gross profit shows profit after production costs. 9 / 25 Income tax expense appears : Before revenue In assets After operating income Before operating income It’s deducted near the end. 10 / 25 Earnings before tax (EBT) equals : Gross profit − tax Operating income − interest Revenue − expenses Net income + tax 11 / 25 Administrative expenses include : Office salaries Sales discounts Freight out Advertising They relate to general business management. 12 / 25 net loss occurs when : Assets > Liabilities Expenses > Revenue Revenue > Expenses Cash < Expenses Loss means expenses exceed revenue. 13 / 25 An increase in depreciation will : Increase net income Increase revenue Increase cash flow Decrease net income It’s an expense. 14 / 25 Revenue represents : Money spent Owner’s capital Money invested Income earned from operations Revenue comes from selling goods or services. 15 / 25 Income statements are prepared using : Accrual accounting Cash basis only Future values Market values Revenues and expenses are matched to periods. 16 / 25 Other income includes : Wages COGS Sales revenue Rent earned It comes from non-core activities. 17 / 25 What is the main purpose of an income statement? Show cash flows Show financial position Show assets only Measure profitability It reports revenues, expenses, and profit over a period. 18 / 25 Which is NOT an operating expense? Utilities Interest expense Salaries Rent Interest is a non-operating expense. 19 / 25 A multi-step income statement shows : Only net income Detailed profit stages Assets and liabilities Cash movements It separates gross and operating income. 20 / 25 Cost of Goods Sold (COGS) includes : Office rent Direct production costs Advertising costs Interest expense COGS relates directly to producing goods sold. 21 / 25 Depreciation is classified as : Revenue Cash expense Operating expense Asset 22 / 25 Which comes first on the income statement? Expenses Revenue Net income Tax Revenue is listed at the top. 23 / 25 Interest expense is: Other expense Administrative expense Operating expense COGS 24 / 25 Which affects net income but not cash? Wages Depreciation Rent Sales 25 / 25 A single-step income statement : Lists all revenues and expenses together Uses multiple sections Separates operating and non-operating Is only for large firms It’s simpler and shorter. Your score is LinkedIn Facebook Twitter VKontakte 0% Send feedback income statementIncome Statement quizIncome Statement quiz level 1
