Revenue and Accounting Quiz

What is revenue often referred to as?

• Bottom line

• Middle line

• Top line

• Side line

What does the term "top line" refer to in a financial context?

• Net profit

• Total expenses

• Revenue

• Gross margin

What is an asset in accounting terms?

• Money owed by a company

• A service provided by a company

• An item of value owned by a company

• A liability of a company

What does a business send to it's customers when they have sold something on Account to record the transaction and request payment?

• A receipt

• An invoice

• A contract

• A memo

What is the accounting equation?

• Assets = Liabilities + Owners' Equity

• Assets = Revenue + Expenses

• Assets = Cash + Equipment

• Assets = Supplies + Prepaid Insurance

What does a negative net income indicate about a company's expenses and revenue?

• Expenses are less than revenue

• Expenses are equal to revenue

• Expenses exceed revenue

• Revenue exceeds expenses

What is the effect of an expense on owner's equity?

• Decreases owner's equity

• Increases owner's equity

• Has no effect on owner's equity

• Doubles owner's equity

What is the effect on the accounting equation when cash is used for an expense?

• Assets increase, liabilities decrease

• Assets decrease, owners' equity decreases

• Assets increase, owners' equity increases

• Assets decrease, liabilities increase

When cash is received for services, only that part of the service actually earned should be recorded as revenue in a fiscal period.

• True

• False