Accounting: 2-6 Introduction to Income Statements

What is another name for the income statement?

• Balance Sheet

• Cash Flow Statement

• Profit & Loss Statement

• Equity Statement

Which financial statement summarizes the total revenues and expenses of an organization?

• Equity Statement

• Income Statement

• Balance Sheet

• Cash Flow Statement

Where are Revenue and Expense accounts located in the accounting framework?

• Liabilities section

• Assets section

• Cash section

• Equity section

What happens to the Equity account when revenue increases?

• It remains the same

• It becomes a liability

• It increases

• It decreases

Which account is affected when office rent expense is paid with cash?

• Expense account

• Cash account

• Revenue account

• Equity account

What is the purpose of a cash flow statement?

• To record revenue and expense transactions

• To summarize total revenues and expenses

• To track cumulative earnings

• To organize the inflows and outflows of cash

Which financial statement is a summary report used to understand the financial story of a company?

• Cash Flow Statement

• Equity Statement

• Income Statement

• Balance Sheet

What is the impact on the income statement when cash is received for services performed?

• It becomes a liability

• It increases

• It remains the same

• It decreases

What happens to the Balance Sheet when cash is used to pay for office rent expense?

• Assets increase, Equity remains the same

• Assets decrease, Equity decreases

• Assets increase, Equity decreases

• Assets decrease, Equity remains the same

Where are Revenue accounts located in the accounting framework?

• Cash section

• Equity section

• Liabilities section

• Assets section