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Accounting for Non-Accountants Quiz 4

1. The income statement presents a summary of an entity’s revenues and expenses for a specific period of time.

True
False

 

2. The only reason to prepare an income statement is to review the sales.

True
False

 

3. What is the main reason that the income statement is prepared?

A) CPAs enjoy preparing the income statements
B) So that the owner will know what the "bottom line" is for that time period.
C) So the owner will know the net income for that time period.
D) Both B and C.

 

4. The income statement has gross profit listed at $30,000 and sales listed at $75,000. What is the amount of cost of goods sold (COGS)?

Zero
$14,200
$45,000
None of the Above.

 


Answers

Use the answers below to figure out your score, and see how well you understand the material of the first chapter. If you scored less than an 80% you should read over the chapter again before moving on.

Question 1: True
Question 2: False
Question 3: Both B and C are correct.
Question 4: $45,000

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