Financial Literacy

Which of the following is an example of inventory?

• Office supplies

• Land owned by the company

• Cash in the bank

• Unsold products

What does a liability represent in accounting?

• Money owed to suppliers

• Cash on hand

• Revenue earned

• Inventory on hand

Administrative costs cover expenses related to:

• Labor costs for manufacturing

• Public relations

• Maintenance and repairs on production equipment

• Materials used in the final product

Petty cash is typically used for:

• Long-term investments

• Small expenses

• Paying loans

• Purchasing inventory

Which of the following is an example of a fixed cost?

• Rent expense

• Cost of raw materials

• Sales commission

• Packaging costs

Overhead costs associated with selling and administrative functions include:

• Direct materials

• Property taxes

• Executive office expenses

• Maintenance and repairs on production equipment

Direct labor costs are associated with:

• Selling and administrative functions

• Manufacturing of a product

• Marketing activities

• Executive office functions

Revenue is generated from:

• Selling goods or services

• Paying off debts

• Purchasing equipment

• Borrowing money

Direct materials are:

• Materials used in the final product

• Indirect materials

• Administrative materials

• Marketing materials

Owner's equity is calculated as:

• Assets - Liabilities

• Liabilities - Assets

• Revenue - Expenses

• Expenses - Revenue