Financial Language of Small Businesses

The purpose of using a chart of accounts in a business is to:

• Organize financial transactions

• Increase sales

• Hire employees

• Market products

Fill in the blank: In your online accounting system, you process hundreds of financial transactions daily, as you have many customers and food suppliers. Every time a transaction occurs, it is recorded through entries in a _______.Ledger

• ledger

• journal

• spreadsheet

• database

Explain how to calculate The Food Dude’s profit according to the income statement terms provided.

• By subtracting total expenses from total revenue

• By adding total expenses to total revenue

• By multiplying total expenses with total revenue

• By dividing total revenue by total expenses

What is the gross profit for the year?

• $50,000

• $75,000

• $100,000

• $125,000

Which of the following is the largest operating expense?

• Mortgage

• Utilities

• Salaries

• Insurance

Calculate the total operating expenses for the year.

• $50,000

• $75,000

• $100,000

• The question has a diagram associated with it. The diagram has been stored separately.

What is the total amount for Depreciation expense?

• $10,000

• $15,000

• $20,000

• $25,000

• 20,000

• 30,000

• 25,000

• 15,000

What is the total amount for Total Operating Expenses?

• $10,000

• $20,000

• $30,000

• $40,000

Fill in the blank: The balance sheet shows what the business owns (______) and the claims against the business (liabilities and owners’ equity) on a particular date.

• assets

• liabilities

• revenue

• expenses