Quiz3 Prep - Soft Introduction to Financial Statements

What are the three main financial statements that help measure a company's financial strength?

• Income Statement, Balance Sheet, and Statement of Cash Flows
• Profit & Loss Statement, Assets Statement, and Liabilities Statement
• Revenue Statement, Equity Statement, and Cash Flow Statement
• Net Income Statement, Owner's Equity Statement, and Cash Balance Statement

Which financial statement's ending point is Net Income or Profit?

• Balance Sheet
• Statement of Cash Flows
• Income Statement
• Owner's Equity Statement

What is the starting point of the Statement of Cash Flows?

• Cash balance
• Net Income or Profit
• Total Assets
• Owner's Equity

Which equation(s) represent the fundamental accounting equation that can NEVER be out of balance?

• Assets = Liabilities - Equity
• Assets - Liabilities - Equity = 0
• Assets = Liabilities + Equity
• Equity = Assets + Liabilities

What does the term "Assets" refer to in financial statements?

• Money that a company owes
• Things a company owns that have value
• Money left over after paying all debts
• Total revenue earned by a company

In the double-entry bookkeeping system, how many entries are made for each transaction?

• One
• Two
• Three
• Four

What does the "bottom line" refer to in an Income Statement?

• Total revenue
• Operating expenses
• Net earnings or losses
• Cost of goods sold

Which of the following is NOT an alternative name for the Income Statement?

• Profit & Loss (P&L)
• Revenue Statement
• Statement of Operations
• Balance Sheet

What does COGS stand for in financial statements?

• Company's Overall Gross Sales
• Cost of Goods Sold
• Calculation of Gross Savings-hi
• Current Operating Gross Surplus

What does EBIT stand for in financial statements?

• Earnings Before Interest and Taxes
• Expenses Before Income Tax
• Equity Before Interest Transfer
• Earnings Balance in Total