2.03 Pt.3 MH Income Statements

Which of the following phrases effectively describes a business’s income statement:

• Budget estimates

• Income preview

• Financial picture

• Cash flow report

Another term for an income statement is a(n)

• Operating Statement

• Interest Statement

• Expense Statement

• Purchasing Statement

Which of the following is the basic calculation used to analyze an income statement:

• Income minus Expenses

• Sales plus Operating Cost

• Revenue plus Sales

• Assets minus Liabilities

Interest a business earns from its bank accounts is included in which category of the income statement?

• Revenue

• Gross Sales

• Net Income

• Assets

A business that loses items to theft includes those items in which category of the income statement?

• Cost of goods sold/Cost of sales

• Long Term Liability

• Operating Expenses

• Capital Goods

What category of an income statement indicates total profit?

• Gross Profit

• Net Profit

• Cash Flow

• Bottom Line

Which is an example of an expense that a business would include in the operating expenses category of an income statement

• Shipping Charges

• Customer Returns

• Cost of Raw Materials

• Insurance Payments

The “bottom line” in a business’s income statement indicates

• Net income

• Net worth

• Gross revenue

• Total cost

One reasons why an income statement should be as accurate as possible is that businesses use it to develop additional

• financial documents

• operating policies

• research reports

• marketing activities

What does an accurate income statement often help a business identify?

• Trouble Spots

• Potential Sales

• Excessive Income

• Problem Vendors