5-1 Income, Expenses and Profit Business U

What is a Balance Sheet?

• A financial statement showing a company's assets, liabilities, and equity at a specific point in time.

• A document that outlines a company's future financial goals.

• A report detailing a company's income and expenses over a period of time.

• A summary of a company's cash inflows and outflows.

Capital is used for:

• investment and growth

• buying groceries

• entertainment purposes

• none of the above

What does Cost of Goods Sold include?

• Direct materials, direct labor, and manufacturing overhead

• Only direct materials

• Only direct labor

• Only manufacturing overhead

Earnings Before Interest and Taxes (EBIT) is calculated as:

• Net Income + Interest + Taxes

• Revenue - Expenses (excluding interest and taxes)

• Gross Profit - Operating Expenses

• Net Profit + Depreciation + Amortization

Gross Profit is calculated as:

• Revenue minus Cost of Goods Sold

• Revenue minus Operating Expenses

• Net Income plus Depreciation

• Total Assets minus Total Liabilities

What does Income include?

• Salary and wages

• Gifts and donations

• Only salary

• None of the above

What is Interest Expense?

• A cost incurred by an entity for borrowed funds.

• A type of revenue earned from investments.

• A form of tax paid on income.

• A discount received on early payments.

What is Inventory?

• A list of goods and materials held in stock

• A financial statement

• A type of investment

• A marketing strategy

A Limited Liability Company is:

• a type of business structure where owners are not personally liable for the company's debts or liabilities.

• a type of business structure where owners are personally liable for the company's debts or liabilities.

• a type of business structure where owners have limited control over the company's operations.

• a type of business structure where owners are required to pay double taxation.

How is Net Income calculated?

• Net Income = Total Revenue - Total Expenses

• Net Income = Total Revenue + Total Expenses

• Net Income = Total Revenue * Total Expenses

• Net Income = Total Revenue / Total Expenses