Gyaan Session 3

Which statement is the first component of the financial statements?

• Balance Sheet

• Cash flow statement

• Income Statement

• Statement of Changes in Equity

The income statement is also known as the __________?

• Profit and Loss Statement

• Cash Flow Statement

• Net Income and Expense Statement

• Statement of Basic Income

The income statement's primary purpose is to show the __________ of a business.

• financial position

• financial performance

• cash position

• expenses

The income statement is drawn up from the figures in the __________.

• Debtors ledger

• Creditors Ledger

• Cash Flow Statement

• Trial Balance

Which of the following statements are true?

• An income statement usually covers a full year

• The income statement may be drawn up for shorter periods, such as one month or three months.

• These shorter periods are used by managers to make internal business decisions

• The period of time that is covered by the income statement (and other financial statements) is called the accounting period.

• All of the above.

A business has $250,000 income and $60,000 expenses. What is the net profit?

• 310,000

• 250,000

• 160,000

• 190,000

Which of the following statements are true?

• The first section of the income statement for a trading business shows the buying and selling of goods.

• The first section of the income statement for a trading business shows net profit.

• The first section of the income statement for a trading business shows the tax expense.

• None of the above.

Which of the following statements are true?

• Cost of goods sold is also known as cost of sales.

• Cost of goods sold is the direct costs of the inventory that we have sold during the year.

• Cost of goods sold is an expense charged against sales to work out a gross profit.

• All of the above.

XYZ Inc. had the following figures in its income statement:

Sales $920,000

Cost of Goods Sold $320,000

Other Income $50,000

Salaries $220,000

Advertising $100,000

Rent $80,000

Other Expenses $50,000

9. The gross profit figure is:

• 650,000

• 150,000

• 600,000

• 200,000

XYZ Inc. had the following figures in its income statement:

Sales $920,000

Cost of Goods Sold $320,000

Other Income $50,000

Salaries $220,000

Advertising $100,000

Rent $80,000

Other Expenses $50,000

9. The net profit figure is:

• 650,000

• 150,000

• 600,000

• 200,000