Basic Accounting Principles

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

• Sales Figure

• Costs 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 Figure

• Costs of Goods Sold

• Gross Profit

• Net Income

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

• Sales Figures

• Costs 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

• Costs 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 costs = Profit

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

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

Accounts payable are classified as which of the following?

• Fixed assets

• Current liabilities

• Owner’s equity

• Net income

Which of the following statements is TRUE?

• Debits decrease assets

• Credits increase expenses

• Debits decrease liabilities

• Credits increase assets