Which statement defines a balance sheet?

1.   ?    A financial statement that shows how a business balances its payroll
2.   ?    A financial statement that shows how much a business has earned or lost over a period of time such as a year
3.   ?    A financial statement that shows the flow of money in and out of the business
4.   ?    A financial statement that shows what a business owns, what it owes and how much it is worth at a particular point in time

Robert purchased a case of lollipops from his wholesale supplier for $10.92. The case contains 7 dozen lollipops. Robert will resell the lollipops for 25 cents each. What is the cost of goods sold per lollipop?

1.   ?    13 cents
2.   ?    25 cents
3.   ?    43 cents
4.   ?    96 cents

What is the total of expenses if salaries are $70,000, advertising if $12,000, rent is $14,000, utilities are $3,600, maintenance is $1,200, insurance is $1,500 and miscellaneous expenses are $1,000?

1.   ?    $103,300
2.   ?    $110,300
3.   ?    $113,000
4.   ?    $123,300

Why is the amount of tax due to the government calculated on the net income?

1.   ?    Business owners prefer this method.
2.   ?    Net income represents the true profit of the company.
3.   ?    Taxing gross income results in too little revenue for the government.
4.   ?    The net income tax law of 1902 requires this.

If beginning inventory is $27,000, merchandise purchased to replenish the stock is $18,000, and the recorded ending inventory is $16,000, what is the cost of goods sold?

1.   ?    $7,000
2.   ?    $11,000
3.   ?    $25,000
4.   ?    $29,000

If total revenue from sales for the year was $375,000 and the cost of goods sold was $190,000, how much gross profit was made from sales for the year?

1.   ?    $185,000
2.   ?    $190,000
3.   ?    $380,000
4.   ?    $565,000

The business lease has been renewed and the monthly lease agreement is set for the next three years. Which type of expense is each lease payment?

1.   ?    Accrued
2.   ?    Fixed
3.   ?    Promotional
4.   ?    Variable

The amount of money left after all the costs and expenses for the specific period of time have been deducted from the income is:

1.   ?    Balance.
2.   ?    Net assets.
3.   ?    Net income.
4.   ?    Net worth.

Which is an example of a financial obligation that a business would expect to take more than one year to repay?

1.   ?    Electricity bill
2.   ?    Mortgage
3.   ?    Printing coupons
4.   ?    Travel expenses

If the gross profit is $200,000 and the total expenses are $103,300, what is the net income/profit (before taxes)?

1.   ?    $96,700
2.   ?    $103,300
3.   ?    $200,000
4.   ?    $303,300

Professional fees paid to an accountant or attorney for occasional work would be which type of expense?

1.   ?    Accrued
2.   ?    Fixed
3.   ?    Promotional
4.   ?    Variable

Which would NOT be considered a fixed expense?

1.   ?    Alarm system
2.   ?    Loan payment
3.   ?    Rent
4.   ?    Utilities

The price the retailer pays for the merchandise sold is:

1.   ?    Cost of goods sold.
2.   ?    Gross sales.
3.   ?    Net sales.
4.   ?    Retail price.

The three components included on a balance sheet are:

1.   ?    Assets, expenses, and net income.
2.   ?    Assets, liabilities, and net worth.
3.   ?    Expenses, net income, and taxes.
4.   ?    Gross sales, net sales, and net income.

On an income statement, net sales revenue minus cost of goods sold is:

1.   ?    Gross profit.
2.   ?    Net profit.
3.   ?    Net sales.
4.   ?    Total expenses.

Which is NOT an example of operating expenses?

1.   ?    Advertising
2.   ?    Maintenance
3.   ?    Rent
4.   ?    Sales taxes

Net income is calculated by subtracting total expenses from:

1.   ?    Cost of goods sold.
2.   ?    Gross profit.
3.   ?    Gross sales.
4.   ?    Net sales.

If the gross profit on sales is $574,000 and total expenses are $401,000, what is the net income?

1.   ?    $103,000
2.   ?    $173,000
3.   ?    $487,500
4.   ?    $975,000

Land, buildings, furniture, and equipment are:

1.   ?    Current assets.
2.   ?    Fixed assets.
3.   ?    Intangible assets.
4.   ?    Other assets.

The value of a life insurance policy on the life of the business owner is which type of asset?

1.   ?    Current
2.   ?    Fixed
3.   ?    Intangible
4.   ?    Other

The monetary value of the business is its:

1.   ?    Balance
2.   ?    Net assets.
3.   ?    Net income.
4.   ?    Net worth.

Anything of value that a business owns is a/an:

1.   ?    Asset
2.   ?    Expense
3.   ?    Fixed cost
4.   ?    Liability

Expenses are BEST described as the:

1.   ?    Cost of goods sold.
2.   ?    Cost of merchandise.
3.   ?    Cost of rent.
4.   ?    Cost of running a business.

Which is NOT an example of variable costs?

1.   ?    Advertising
2.   ?    Hourly wages
3.   ?    Loan payment
4.   ?    Travel

Which appears on the income statement?

1.   ?    Assets
2.   ?    Liabilities
3.   ?    Net profit
4.   ?    Owner's equity

Which is a balance sheet item?

1.   ?    Assets
2.   ?    Cost of merchandise
3.   ?    Net profit
4.   ?    Operating Expenses

Which is NOT a factor on an income statement?

1.   ?    Cost of goods sold
2.   ?    Expenses
3.   ?    Liabilities
4.   ?    Net income