Self Assessment Quizzes

CHAPTER 19: Section 2 The Income Statement

	1.	The income statement for a merchandising business has

		a.	three sections
		b.	four sections
		c.	five sections
		d.	six sections

	2.	Operating income is income earned before deducting

		a.	federal corporate income taxes
		b.	operating expenses
		c.	cost of merchandise sold
		d.	net income

	3.	The actual cost to the business of merchandise that was sold to customers is called

		a.	purchases
		b.	net purchases
		c.	cost of merchandise sold
		d.	merchandise inventory

	4.	Cost of Merchandise Available for Sale less Ending Merchandise Inventory equals

		a.	Beginning Merchandise Inventory
		b.	Net Purchases
		c.	Net Sales
		d.	Cost of Merchandise Sold

	5.	The amount of sales for the period, less any discounts returns and allowances is called

		a.	total sales
		b.	net sales
		c.	revenue
		d.	income

	6.	Gross profit is found by

		a.	adding the cost of merchandise sold to net sales
		b.	subtracting operating expenses from net sales
		c.	subtracting cost of merchandise sold from net sales
		d.	adding cost of merchandise sold and operating expenses

	7.	All the costs related to merchandise purchased during the period are called

		a.	net purchases
		b.	cost of merchandise sold
		c.	cost of business
		d.	net selling expense

	8.	When dollar amounts reported on a financial statement are also reported as a percentage of another amount, it is referred to as

		a.	comparative statements
		b.	vertical analysis
		c.	horizontal analysis
		d.	supine analysis

	9.	The revenue section of the income statement reports on

		a.	Sales and Sales Discounts
		b.	Sales and Purchases
		c.	Sales, Sales Discounts, and Purchase Returns and Allowances
		d.	Sales, Sales Discounts, and Sales Returns and Allowances