Accounting Concepts Quiz

What does Sales Revenue represent?

• Total profit from operations

• Total income earned from sales of goods or services

• Total expenses incurred

• Total cash collected from sales

What does Cost of Goods Sold (COGS) represent?

• Expenses directly tied to the sale of inventory

• Total sales revenue

• Operating expenses

• Total net income

Which of the following is an operating expense?

• Accounts Payable

• Cost of Goods Sold

• Rent Expense

• Sales Revenue

True or False: Proceeds from selling a manager’s office desk would be classified as sales revenue.

Evaluate responses using AI:

OFF

True or False: Sales Revenue and Service Revenue are interchangeable terms.

Evaluate responses using AI:

OFF

What are the two types of inventory systems?

• Periodic and Continuous

• Periodic and Perpetual

• Perpetual and Ongoing

• Real-time and Static

Under a perpetual inventory system, when is the Cost of Goods Sold updated?

• At the end of the accounting period

• As each sale occurs

• After a physical inventory count

• Once a month

When does a company update its inventory under a perpetual inventory system?

• After year-end financial reporting

• When goods are purchased and sold

• Only after a physical inventory count

• When invoices are paid

Which of the following is an advantage of a perpetual inventory system?

• Lower administrative costs

• Continuous inventory tracking

• Requires less technology

• Reduces errors in payroll

Which of the following is a disadvantage of a perpetual inventory system?

• Requires more frequent physical counts

• More expensive and complex to maintain

• Cannot track cost of goods sold

• Reduces tracking accuracy