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