Accounting Fundamentals

Gross profit is calculated by:

• Revenue - Total Costs

• Revenue + Variable Costs

• Revenue - Cost of Sales

• Revenue - Fixed Costs

The Income Statement lists a businesses:

• Assets and Expenses

• Owner's Equity and Revenue

• Revenue, cost of goods and Expenses

• Expenses and Net Assets

What is the purpose of an income statement?

• calculate the bank balance

• calculate net assets

• calculate sales

• calculate net profit

An expense is:

• money the business owes to other organisations and people

• money a business spends on the general operation of business

• money owed to the Business

• None of the above

Cash in Bank is classified as

• Current Asset

• Current Liability

• Non-current Asset

• Non-current Liability

 If Net Profit (operating profit)=£3000 and government tax=£1000 and dividends paid=£500 then retained profit is

• £1000

• £1500

• £2000

• £2500

Refers to the financial obligations of a company that are not expected to be settled within one year.

• Non-current Assets

• Current Assets

• Non-Current Liabilities

• Current Liabilities

Notes payable is classified as

• Current Asset

• Current Liability

• Non-current Asset

• Non-current Liability

What happens to the retained profit in the income statement?

• Transferred and added to liabilities in the balance sheet

• Transferred and subtracted to capital in balance sheet

• Transferred and added to capital in balance sheet

• Transferred and subtracted to liabilities in balance sheet

 

What is an identifiable nonmonetary asset without physical substance

• tangible assets

• intangible assets

• PPE

• investment