Accounting Terminologies

What is the purpose of an income statement?

• To determine the company's customer satisfaction and loyalty.

• To calculate the company's total assets and liabilities.

• To provide a summary of a company's revenues, expenses, and net income over a specific period of time.

• To track the company's stock prices and market value.

Which financial statement shows the financial position of a company at a specific point in time?

• balance sheet

• statement of retained earnings

• cash flow statement

• income statement

What is the purpose of a cash flow statement?

• To provide information about cash inflows and outflows

• To track the movement of physical cash

• To calculate the net worth of a company

• To determine the market value of a company

What are accounts payable?

• Amount of money owed to customers for goods or services received but not yet paid for.

• Amount of money owed to suppliers or vendors for goods or services received but not yet paid for.

• Amount of money owed to employees for goods or services received but not yet paid for.

• Amount of money owed to shareholders for goods or services received but not yet paid for.

What are accounts receivable?

• Amounts owed to a company by its suppliers for goods or services provided on credit.

• Amounts owed to a company by its employees for goods or services provided on credit.

• Amounts owed to a company by its shareholders for goods or services provided on credit.

• Amounts owed to a company by its customers for goods or services provided on credit.

What is the formula to calculate net income?

• Total revenue - Total expenses

• Total revenue / Total expenses

• Total revenue x Total expenses

• Total revenue + Total expenses

What is the formula to calculate total assets?

• Total assets = Current assets - Non-current assets

• Total assets = Current liabilities + Non-current liabilities

• Total assets = Current assets * Non-current assets

• Total assets = Current assets + Non-current assets

What is the formula to calculate operating cash flow?

• Operating Cash Flow = Net Income + Depreciation + Amortization + Non-cash Expenses

• Operating Cash Flow = Net Income - Depreciation - Amortization - Non-cash Expenses

• Operating Cash Flow = Net Income + Depreciation - Amortization + Non-cash Expenses

• Operating Cash Flow = Net Income + Depreciation + Amortization + Non-cash Expenses - Changes in Working Capital

What is the difference between accounts payable and accounts receivable?

• Accounts payable is the money a company owes to its customers, while accounts receivable is the money owed to a company by its suppliers.

• Accounts payable and accounts receivable are the same thing.

• Accounts payable is the money a company owes to its employees, while accounts receivable is the money owed to a company by its shareholders.

• Accounts payable is the money a company owes to its suppliers, while accounts receivable is the money owed to a company by its customers.

What is the purpose of a balance sheet?

• To determine a company's employee satisfaction

• To provide a snapshot of a company's financial position

• To analyze a company's marketing strategies

• To track a company's sales and revenue