Test Your Knowledge: Income Statement & Balance Sheet

How up to speed are you on accounting terminology? Have a little fun and test your business knowledge!

Income Statement and Balance Sheet Quiz

1. What does GAAP stand for? Hint: It’s the series of rules and guidelines used by accountants to make basic decisions for recording and classifying financial information.
2. Anything your business owns that has value is known as an ____________.
3. Debts or commitments your business owes are called ____________.
4. A ____________ transaction is any financial event that affects your company.
5. Total Assets = Liabilities + Owner’s ____________
6. Net ____________ after taxes is added to the ____________ account on the balance sheet.
7. Which of the following is not a type of expense shown on an income statement:
   1. Inventory
   2. Rent
   3. Insurance
   4. Advertising
8. The end result of an income statement is to reflect revenue minus ____________.
9. Gross profit is the difference between sales and ____________.
10. If expenses exceed revenue during a given accounting period, the ____________ will show a ____________.
11. Net income after taxes is commonly referred to as the ____________.

1. Generally Accepted Accounting Principles
2. asset
3. liabilities
4. business
5. equity
6. income, owner’s equity
7. inventory (it’s an asset)
8. expenses
9. cost of goods sold
10. income statement, net loss
11. bottom line