Knowledge check (balance sheet , income statement)

Ghadeer just sipped her third cup of Arabic coffee, buzzing with energy. If her gross profit is $70 and her operating expenses are $30, what’s her operating profit? Or did she just calculate how much coffee she can buy with her profit instead?

• Coffee is the real profit!

• $40

• $70

• $30

Haya is preparing the P & L report, which of the following would be considered an operating expense?

• Cost of goods sold

• Rent for office space

• Sales revenue

• Interest on loans

Reaab decides to review her company's financials. What does a balance sheet reveal?

• Its total revenue

• How much gross profit a business made

• What a business owns and owes

• How much it paid in rent

Samer is curious about the timeframe of financial reports. How long does a balance sheet cover?

• One quarter

• One year

• One tax year

• One moment in time

Wasim is organizing his company’s assets. Identify the liability!

• Stock

• Machinery

• Money owed to other businesses (creditors)

• Cash in bank

Feras is studying for his accounting exam. True or False: Current liabilities are long-term.

• True

• False

Abdulsalam and Muhanned are evaluating his inventory. Spot the asset!

• A loan to buy a van

• Reduced rent

• A satisfied customer

• Any stock (Inventory) that you have

Mennah is learning about asset liquidity. Can fixed assets be converted to cash quickly?

• True

• False

Elham is applying for a bank loan because she is selected for EHL program. A bank loan is typically classified as:

• a current asset

• a current liability

• a fixed asset

• long-term liability

Maysa just finished a big slice of cheesecake and is feeling like a math genius. Is this the Accounting Equation? Assets = Capital - Liabilities, or did she mix up her dessert recipe with her accounting notes?

• True

• False