Business Recovery Workshop 8AB 4th Period

Which of the following statements accurately defines Net Income?

• The money generated by the sale of goods or services.

• The profit after deducting operating expenses from gross profit.

• The total profit after all expenses are deducted from revenue.

• A summary of a company's financial position at a specific point in time.

What is the difference between revenue and the cost of goods sold (COGS)?

• Operating Expenses

• Other Income and Expenses

• Gross Profit

• Net Income

The expenses incurred in the normal course of business operations, excluding COGS, are referred to as:

• Revenue

• Gross Profit

• Operating Expenses

• Net Income

Entries that increase asset or expense accounts and decrease liability, equity, or revenue accounts are:

• Credits

• Statements

• Inconsistencies

• Debits

The principle that requires a company to consistently apply the same accounting methods and principles from period to period, ensuring comparability of financial statements over time, is called the:

• Cost Principle

• Matching Principle

• Consistency Principle

• Materiality Principle

In double-entry accounting, entries that increase liability, equity, or revenue accounts and decrease asset or expense accounts are:

• Credits

• Statements

• Inconsistencies

• Debits

These ratios evaluate a company's ability to generate profit relative to its revenue, assets, equity, or other financial metrics. Examples include the gross profit margin, net profit margin, return on assets (ROA), and return on equity (ROE). Profitability ratios indicate how well a company is performing in terms of earning a profit.

• Liquidity Ratios

• Solvency Ratios

• Profitability Ratios

• Efficiency Ratios

What is the total amount of money generated by the sale of goods or services before any expenses are deducted?

• Cost of Goods Sold (COGS)

• Operating Income

• Net Income

• Revenue

These are metrics used to evaluate a company's financial performance and condition. They are derived from the financial statements and provide insights into various aspects of the business.

• Accounting Principles

• Accounting Statements

• Common Financial Ratios

• Financial Equations

Books or digital records where all accounts are maintained are called:

• Accounts

• Statements

• Inconsistencies

• Ledgers (general and subsidiary)