Financial Statements

What is the purpose of preparing the Statement of Financial Performance?

• inform stakeholders the profitability of business

• inform stakeholders the income and expenses of business

• inform stakeholders the nature of business

• inform stakeholders the size of business

What is the equation to calculate Gross profit?

• Sales revenue + Income - Expenses

• (Sales revenue - Sales returns) - Cost of sales

• (Sales revenue + Cost of sales) - Sales returns

• (Sales revenue + Sales returns) - Cost of sales

Which of the following are items of Expenses?

• salaries, utilities, inventory, discount allowed

• salaries, utilities, insurance, discount allowed

• salaries, utilities, interest received, discount allowed

• salaries, utilities, loan, discount allowed

What is the difference between non-current assets and current assets?

• NCA provide benefits that are used within one financial period but CA provide benefits that last beyond one financial period

• NCA provide benefits that last beyond one financial period but CA provide benefits that are used within one financial period

• NCA are easily converted to cash but CA are not easily converted to cash easily

• NCA are not loans but CA are loans

Transferring Information from the general journal to the ledger accounts is known as________?

• posting

• copying

• extending

• calculating

When revenue > expenses, then there is a

• Net Loss

• mistake in the math

• Net Income

• transposition error

All of the following are assets, except for?

• Goodwill

• Patents

• Loans to other businesses

• Loans from other businesses

Stock at the beginning of the year

• Opening Inventory
• Sales
• Purchases
• Drawings

Expense on transportation of purchases

• Delivery expenses
• Freight outwards
• Cartage on goods purchased

A firm’s financial obligations to short-term creditors, which must be repaid within one year.

• Current Assets

• Current Liabilities

• Accounts Receivable

• Accounts Payable