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Questions and Answers
Which financial statement reports the financial position of a business at a specific point in time?
Which financial statement reports the financial position of a business at a specific point in time?
- Cash flow statement
- Income statement
- Statement of changes in equity
- Balance sheet (correct)
What is the formula to calculate gross profit?
What is the formula to calculate gross profit?
- Net sales - Cost of goods sold (correct)
- Operating income + Non-operating income
- Net income - Operating expenses
- Net profit margin / Net sales
What does the term 'accrual' refer to in accounting?
What does the term 'accrual' refer to in accounting?
- Expenses paid in advance
- Revenue earned but not yet received (correct)
- Cash paid after it is earned
- Cash received before it is earned
Which financial statement summarizes a company's revenues and expenses over a period of time?
Which financial statement summarizes a company's revenues and expenses over a period of time?
What is the purpose of the statement of owner's equity?
What is the purpose of the statement of owner's equity?
What is the main purpose of the balance sheet?
What is the main purpose of the balance sheet?
Flashcards
Balance Sheet
Balance Sheet
A financial statement that shows a company's assets, liabilities, and equity at a specific point in time.
Gross Profit
Gross Profit
The difference between net sales and the cost of goods sold.
Accrual
Accrual
Revenue that has been earned but not yet received in cash.
Income Statement
Income Statement
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Statement of Owner's Equity
Statement of Owner's Equity
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What is the main purpose of the balance sheet?
What is the main purpose of the balance sheet?
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