2.01 Income Statements

A ​ (a)   effectively describes a business’s income statement:

• financial picture
• income preview
• cash flow report
• budget estimate

Another term for an income statement is a(n)​ (a)  

• operating statement.
• expense statement.
• interest statement.
• purchasing statement.

​ (a)   minus ​ (b)   is the basic calculation used to analyze an income statement:

• Revenue
• expenses
• sales
• liabilities
• operating costs
• assets

Interest a business earns from its bank accounts is included in the ​ (a)   category of the income ​ (b)   ?

Correct Answer  Revenue

• revenue
• statement
• expense
• net income
• gross sales

Business ​ (a)   is an example of an ​ (b)   that a business would be included on an income statement.​

• insurance
• expense
• revenue
• income

The “bottom line” in a business’s income statement indicates​ ​ (a)  

• net income.
• gross revenue.
• net worth.
• total cost.

Revenue for Sally's soda shop for 1 month was $2,300. Expenses for the same month were $3,455.

What is the profit or loss?

*Indicate Profit with a positive number

*Indicate loss with a negative number

Mathematical Equivalence

ON

An​ (a)   income statement often help a business identify​ (b)  

• accurate
• trouble spots.
• excessive income
• excessive income.
• old
• potential sales.

Businesses often compare the income statement information for several consecutive​ (a)   to calculate​ sales​ (b)  

• years
• growth
• income.
• income
• days
• trends
• ratios

One reason why​ (a)   review a business’s income statement is to decide if the business will be able to​ (b)  

• banks
• repay a loan
• schools
• increase staff