Financial Accounting QuizIncome Statement quiz level 1 02/05/2026 1 min read 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 Interest expense is: Other expense COGS Administrative expense Operating expense 2 / 25 Gross margin is : Gross profit ÷ Revenue Net income ÷ Assets Expenses ÷ Revenue Revenue ÷ COGS It measures production efficiency. 3 / 25 An increase in depreciation will : Decrease net income Increase cash flow Increase net income Increase revenue It’s an expense. 4 / 25 Freight-out is : Other expense COGS Administrative expense Selling expense 5 / 25 The bottom line refers to : Net income Revenue Gross profit Operating income It’s the final profit figure. 6 / 25 Other income includes : Sales revenue Wages Rent earned COGS It comes from non-core activities. 7 / 25 Gross profit equals : Revenue − COGS Operating income − tax Net income + tax Revenue − Expenses Gross profit shows profit after production costs. 8 / 25 Administrative expenses include : Office salaries Advertising Sales discounts Freight out They relate to general business management. 9 / 25 Income statements are prepared using : Accrual accounting Cash basis only Market values Future values Revenues and expenses are matched to periods. 10 / 25 Net income is : Gross profit Operating income Profit after all expenses Revenue It’s the “bottom line.” 11 / 25 A multi-step income statement shows : Assets and liabilities Only net income Detailed profit stages Cash movements It separates gross and operating income. 12 / 25 Cost of Goods Sold (COGS) includes : Advertising costs Office rent Interest expense Direct production costs COGS relates directly to producing goods sold. 13 / 25 Revenue represents : Income earned from operations Owner’s capital Money spent Money invested Revenue comes from selling goods or services. 14 / 25 The income statement covers: A specific point in time A period of time Only one day A future period It summarizes performance over a month, quarter, or year. 15 / 25 Earnings before tax (EBT) equals : Revenue − expenses Operating income − interest Gross profit − tax Net income + tax 16 / 25 Which affects net income but not cash? Rent Depreciation Sales Wages 17 / 25 Which is NOT an operating expense? Interest expense Utilities Salaries Rent Interest is a non-operating expense. 18 / 25 Income tax expense appears : Before revenue Before operating income In assets After operating income It’s deducted near the end. 19 / 25 What is the main purpose of an income statement? Show assets only Show financial position Measure profitability Show cash flows It reports revenues, expenses, and profit over a period. 20 / 25 Selling expenses include: Raw materials Sales commissions Factory rent Inventory Selling expenses support sales activity. 21 / 25 Matching principle means : Matching cash inflows with outflows Matching revenues with expenses Matching assets with liabilities Matching equity with profit 22 / 25 Which comes first on the income statement? Tax Expenses Net income Revenue Revenue is listed at the top. 23 / 25 A single-step income statement : Lists all revenues and expenses together Uses multiple sections Is only for large firms Separates operating and non-operating It’s simpler and shorter. 24 / 25 net loss occurs when : Cash < Expenses Assets > Liabilities Expenses > Revenue Revenue > Expenses Loss means expenses exceed revenue. 25 / 25 Operating income is calculated as: Net income − tax Gross profit − operating expenses Revenue − COGS Revenue − tax It shows profit from core operations. Your score is LinkedIn Facebook Twitter VKontakte 0% Send feedback 🚀 Join Telegram Group 📢 Telegram Channel 📘 Facebook Group 👍 Facebook Page 📌 Pinterest
