SADDLE: LO3 BE ABLE TO CARRY OUT FINANCIAL RECORD KEEPING D2

What is the purpose of financial statements?

• To record the financial activities of a business

• To provide an immediate overview of the business's financial position

• To show whether or not the business is well-managed and successful

• All of the above

Who are the different types of people interested in the accounts of a business?

• Shareholders

• Managers

• Employees

• All of the above

Which financial analysis documents help managers assess the success of a business?

• Income statement

• Balance sheet

• Both income statement and balance sheet

• None of the above

What does the income statement show?

• Actual income and expenditure for a year

• Revenue received from sales

• How much money was spent

• All of the above

What is the gross profit?

• The total amount of income generated by the sale of goods and services

• The cost of producing a product or providing a service

• The money made from selling a product after deducting the cost of sales

• The money made from selling a product after deducting all costs

What is depreciation?

• The drop in the value of a business asset over time

• The money left over after all other additions or deductions from the revenue

• The cost of producing a product or providing a service

• The total amount of income generated by the sale of goods and services

When is a balance sheet typically produced?

• Once a month

• Once a quarter

• Once a year

• Once every five years

What does the balance sheet show?

• Assets, liabilities, and owner's equity

• Revenue, expenditure, and profit

• Income and expenses

• Debtors and creditors

What are fixed assets?

• Items the business must keep to trade

• Items that change with every transaction

• Money the business owes to other people

• Money invested by the owner or shareholders

What is owner's equity?

• The money the business has in the bank

• The money the business is owed by other people

• The capital that is put into the business

• The money the business owes to other people