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