Interim Financial Statements Quiz

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SpiritualMossAgate
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15 Questions

Which one of the following statements is true about the fiscal year?

Each company has their own way to define the fiscal year.

What is the excess of revenues over expenses called?

Income

When does a company recognize revenue under the accrual basis?

When a company earns revenue

What is the decrease in net assets as a result of consuming or giving up resources called?

Expenses

What is the original acquisition cost of the inventory that a company sells to customers called?

Cost of goods sold

What is the total cumulative owners' equity generated by income called?

Retained earnings

What are financial statements prepared for?

The interim periods

Which of the following is a requirement for revenues to be recognized under accrual basis?

The customer has accepted the goods and services

When are revenues considered to be 'realized' under accrual basis?

When the company receives cash in exchange for goods and services

What is the purpose of the matching method in recognizing revenues?

To record expenses in the same time period as the revenues

What types of expenses are linked to revenues?

Product costs recorded during the sale

What types of expenses are not linked to revenues?

Period costs that support a company's operations

What is the purpose of the Income Statement?

To report all revenues and expenses pertaining to a specific time period

What is the net income on an income statement?

The remainder after deducting all expenses from revenues

What do we call it when expenses exceed revenues?

Net loss

Test your knowledge on revenues and expenses in the context of interim financial statements. Learn about how companies measure income, define the fiscal year, and prepare financial statements for interim periods.

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