Basic accounting principles ICEV

Which of the following are the costs directly associated with making or acquiring products such as materials purchased from outside suppliers?

• sales figures

• cost of goods sold

• gross profit

• net income

Which of the following is the amount of money the business has earned after paying income taxes?

• sales figures

• cost of goods sold

• gross profit

• net income

Which of the following is the correct equation for profit?

• revenue - expenses = profit

• revenue + expenses = profit

• revenue - net income = profit

• revenue - sales cost = profit

Which of the following represents the amount of revenue generated by a business?

• sales figures

• cost of goods sold

• gross profit

• net income

Which of the following is derived by subtracting the cost of goods sold from the net sales figures?

• sales figures

• cost of goods sold

• gross profit

• net income

Which of the following is the most liquid asset?

• real estate

• stocks

• cash

• machinery

Which of the following is NOT a current asset?

• checking accounts

• accounts receivable

• money market accounts

• land

Which of the following represents is the basic accounting equation?

• Assets = Liabilities + Owner’s Equity

• Assets = Expenses - Revenue

• Assets = Net income - Revenue

• Assets = Liabilities + Net income

Accounts payable are classified as which of the following?

• fixed assets

• current liabilities

• owners equity

• net income

Which of the following statements is TRUE?

• Debits decrease assets

• Credits increase expenses

• Debits decrease liabilities

• Credits increase assets