Accounting 1st Quiz

What does the income statement measure?

• Total company cash

• Net assets

• Operating performance over a time period

• Market share

When is revenue recognized in accrual accounting?

• When payment is received

• When a good or service is delivered

• When cash is deposited

• When inventory is purchased

What does COGS include?

• Direct labor and raw materials

• Interest on loans

• Rent and utilities

• CEO salaries

Which line item represents indirect operating expenses?

• COGS

• SG&A

• R&D

• Depreciation

What is Gross Profit?

• Revenue minus SG&A

• Revenue minus COGS

• Revenue minus taxes

• Net income

Depreciation is an example of what type of expense?

• Variable cost

• Operating cash outflow

• Non-cash expense

• Inventory write-down

What does EBITDA stand for?

• Earnings Before Income, Taxes, and Bonuses

• Earnings Before Interest, Taxes, Depreciation, and Amortization

• Earnings Before Income Taxes and Assets

• Enterprise Book Income Tracking

What is the final line item on an income statement?

• EBIT

• Revenue

• Net income

• Operating profit

What does the balance sheet show?

• Company profits over time

• What a company owns and owes at a specific time

• All investments

• Company sales figures

What is an example of a current asset?

• Long-term investments

• Inventory

• Buildings

• Equipment depreciation