Cash Flow and Income Statement Quiz

Which of the following activities is classified as an operating activity in the cash flow statement?

• Purchase of equipment

• Issuance of shares

• Payment of salaries

• Repayment of loans

What section of the cash flow statement would you find the purchase of a new company vehicle?

• Operating activities

• Investing activities

• Financing activities

• Equity activities

What is the primary purpose of the cash flow statement?

• To show a company’s profitability over time

• To report changes in the equity of a company

• To provide information about a company’s cash receipts and payments

• To measure the net worth of a business

Which of the following is typically the first item listed on an income statement?

• Net income

• Operating expenses

• Gross profit

• Revenue (Sales)

What does the income statement primarily show?

• Changes in cash during the period

• Financial position at a specific date

• Profitability over a period of time

• Owner’s equity at year-end

Which of the following is deducted from revenue to calculate gross profit?

• Operating expenses

• Interest expenses

• Cost of goods sold (COGS)

• Income tax

Which of the following would be considered a non-operating item on the income statement?

• Salaries expense

• Sales revenue

• Interest income

• Rent expense

What are the three main components of a balance sheet?

• Income, expenses, and equity

• Assets, liabilities, and equity

• Revenue, expenses, and net income

• Cash, accounts receivable, and inventory

Which of the following is classified as a current asset?

• Building

• Equipment

• Accounts receivable

• Trademark

The accounting equation represented by the balance sheet is:

• Assets = Revenue + Expenses

• Assets = Liabilities – Equity

• Assets = Liabilities + Equity

• Assets = Income – Expenses