a
.
It
shows
the
net
inflow
of
economic
resources
to
the
entity
for
a
certain
period
of
time
.
b
.
It
shows
the
net
inflow
of
economic
resources
to
the
entity
as
of
a
certain
point
in
time
.
Multiple choice. Choose the letter of the best answer.
1. Which of the following is NOT true regarding the income statement?
If a net income is recorded during the period, revenues exceed expenses.
d. If a net loss is recorded during the period, expenses exceed revenues.
2. The amount obtained when all the selling expenses are deducted from gross profit is called
d. Operating income
a. Net profit
b. Gross profit
c. Net income
refers to the actual amount paid for articles bought including the
3. The
buying expenses.
d. Cost of purchases
a. Selling price b. Buying price c. Purchase price
4. In the income statement, revenues are
a. Usually presented below net income and expenses
b. Always presented below net income and expenses
c. Usually presented above net income and expenses
d. Always presented above net income and expenses
5. If a net income was recorded during the year, which of the following is always true?
a. Assets' increase b. Liabilities' decrease c. Owner's capital increase d. None of these
6. Which of the following could result due to a net loss in operations?
a. Decrease in assets
c. Decrease in owner's capital
b. Increase in liabilities
d. All of the above
7. A decrease in equity means there was a net loss during the period.
a. Never true
b. Sometimes true c. Always true d. Rarely true
8. The
is the financial statement that shows if a business is earning a profit
or incurring a loss.
a. Statement of financial position
c. Statement of changes in equity
b. Balance sheet
d. Insome statement​