1. A financial report that shows how much profit a company makes is called?
balance sheet
Income statement
break even analysis
cash flow
2. Rent expense for VE companies should be?
$2,000 per month
$3,000 per month
$3,500 per month
$3,750 per month
3. An income statement contains the following account?
assets
liabilities
stockholders' equity
expenses
4. What method was used for depreciation?
straight-line
sum of the years digits
first in first out
accelerated
5. For a service business what accounting information is needed for the business contract?
general ledger
accounts receivable
payroll
accounts payable
6. If sales are 150,000 and cost of goods sold is 75,000, what is the gross profit?
$75,000
$85,000
$225,000
$250,000
7. For a merchandising business, the amount of the business contract includes?
assets and liabilities
revenue and expense
salary and cost of goods sold
stockholders' equity
8. Payroll taxes, the ones the company must pay include?
State income tax and federal income tax
FICA and Medicare
Rent expense and repairs
all of the above
9. The FICA tax percentage is?
.032
.055
.062
.075
10. For a service business, how do you find net income?
subtract revenue from expenses
subtract expenses from revenue
add cost of goods sold to total expenses
add revenue and sales
11. Bizstats is what?
a web site with information about industry financials
a slang term for business statistics
a payroll application
an email server
12. Cost of goods sold is calculated by?
adding net income to revenue
multiplying cogs percentage times total revenue
liabilities = revenue - expenses
none of the above
13. If gross profit is 100,000 and total expenses are 110,000, what is the net profit?
$10,000
a negative $10,000
$100,000
$110,000
14. If revenue is $125,000 and cost of goods sold is $50,000, what is the gross profit?
$400,000
$500,000
$300,000
$75,000
15. If gross profit is $105,000 and total expenses = $100,000, what is the net income?
$-5,000
$5,000
$15,000
none of the above
Chapter 3 Accounting Test