Financial Statements Quiz

Which of the following is not a financial statement?

• Income Statement

• Balance Sheet

• Cash Flow Statement

• Bank Reconciliation Statement

The purpose of an Income Statement is to show:

• Assets and liabilities of a business

• Profit or loss for a period

• How cash flows in and out of the business

• Owner’s equity only

Which of the following appears first in an Income Statement?

• Net Profit

• Gross Profit

• Sales/Revenue

• Operating Expenses

Which of these is not an expense?

• Rent paid

• Advertising

• Wages

• Debtors

What is the correct formula for Gross Profit?

• Sales – Cost of Sales

• Sales – Expenses

• Sales + Cost of Sales

• Sales – Liabilities

Which item is considered Revenue?

• Interest received

• Electricity

• Salaries

• Stationery

In the Income Statement, “Cost of Sales” refers to:

• Expenses like water and electricity

• The cost of buying goods sold to customers

• The profit made on sales

• The value of closing stock only

If Sales = R50 000 and Cost of Sales = R30 000, Gross Profit is:

• R80 000

• R20 000

• R50 000

• R30 000

Which is an example of an Operating Expense?

• Sales

• Depreciation

• Owner’s Equity

• Bank Loan

Net Profit is calculated as:

• Gross Profit – Operating Expenses + Other Income

• Sales – Cost of Sales

• Assets – Liabilities

• Gross Profit + Expenses