FAR — Financial Accounting & Reporting — Quiz 68

Questions in this quiz (10)

1. Which financial statement reports company profitability?

   • Balance sheet
   • Income statement
   • Statement of retained earnings
   • Statement of cash flows

2. Which formula determines net profit?

   • Revenue − Expenses
   • Assets − Liabilities
   • Revenue + Expenses
   • Assets + Equity

3. Which financial measure reflects earnings for a period?

   • Net income
   • Total liabilities
   • Assets
   • Inventory

4. Why is proper expense recognition important?

   • It increases assets
   • It ensures accurate financial reporting
   • It eliminates liabilities
   • It increases revenue

5. Which of the following best describes operating income?

   • Revenue from selling stock
   • Income from core business operations
   • Revenue from loans
   • Gain from asset sales

6. Which of the following is non-operating revenue?

   • Sales revenue
   • Service revenue
   • Dividend income
   • Consulting revenue

7. Which of the following best describes operating costs?

   • Costs of daily business activities
   • Investment costs
   • Financing costs
   • Asset purchases

8. Which of the following is a selling expense?

   • Office utilities
   • Marketing expense
   • Interest expense
   • Equipment purchase

9. Which of the following is an administrative expense?

   • Sales commission
   • Advertising expense
   • Office rent
   • Cost of goods sold

10. Which of the following represents gross profit minus operating expenses?

    • Net income
    • Operating income
    • Revenue
    • Cost of goods sold