Unit 5 Finance and Accounting Quiz

The financial gain earned when the revenue generated from a business exceeds all the expenses associated with achieving that revenue, over a certain time period is:

• capital

• profit

• proforma

• revenue

What is used to report revenues, expenses and income for a specific time period?

• Profit and Loss Statement

• Cost of Goods Sold

• Gross Profit

• Proforma

When a shoe manufacturer purchases fabric, rubber, and other raw materials, then adds all the direct labor and manufacturing costs used to produce those shoes, that is:

• Gross Profit

• Profit and Loss Statement

• Total Operating Expenses

• Cost of Goods Sold

How is Gross Profit calculated?

• Revenue minus Cost of Goods Sold

• Revenue plus Cost of Goods Sold

• Inventory minus Revenue

• Inventory plus Revenue

Gross Profit minus Operating Expenses equals:

• Operating Income

• Gross Profit

• Revenue

• Capital

Revenue is the total sales for a company over a certain period of time, and is also often referred to as the _______________.

• bottom line

• gross profit

• operating income

• top line

The process of recording, maintaining, and reporting an organization’s financial transactions and records is:

• accounting

• finance

• management

• planning

An organization’s main accounting record that stores transactions and financial data, organized by accounts is the:

• Shareholders’ Equity

• Assets

• General Ledger

• Liabilities

Complete the definition with the correct terms. The “double-entry accounting system” means that every financial transaction has an equal and opposite effect, recorded in at least two accounts, where one account gets a ___________ and the other a ___________.

• debit; credit

• asset; liability

• increase; decrease

• equity; revenue

What is the accounting equation?

• Shareholders’ Equity + Assets = Liabilities

• Assets + Liabilities = Shareholders’ Equity

• Assets = Liabilities + Shareholders’ Equity

• Shareholders’ Equity – Assets = Liabilities