Page | 1
SBE Financials Section 1 (Biz U Bus 5-1)
Questions and Answers (Expert Solutions)
Q: Balance Sheet
ANS 🗹🗹: A balance sheet is a financial statement that marks a company's financial
situation at a moment in time, showing all assets, liabilities and owners' equity.
Q: Capital
ANS 🗹🗹: Money used to make an investment, produce a product, fund operations,
and generate income.
Q: Cost of Goods Sold
ANS 🗹🗹: The cost a company pays for the goods it sells; it includes the cost of the
raw materials along with the direct labor and manufacturing costs used to produce
the goods.
Q: Earnings Before Interest and Taxes (EBIT)
ANS 🗹🗹: Operating Income minus non-operating income and non-operating
expenses; also calculated as Net Income Plus Interest and Taxes.
Q: Gross Profit
ANS 🗹🗹: Calculated as Revenue minus Cost of Goods Sold.
Q: Income
ANS 🗹🗹: All money received from doing business, including sales revenue and
other income.
Q: Interest Expense
ANS 🗹🗹: Money spent to pay for borrowed money - interest payable on loans,
bonds, lines of credit; it is calculated as the interest rate times the outstanding
principal amount of the debt.
SBE Financials Section 1 (Biz U Bus 5-1)
Questions and Answers (Expert Solutions)
Q: Balance Sheet
ANS 🗹🗹: A balance sheet is a financial statement that marks a company's financial
situation at a moment in time, showing all assets, liabilities and owners' equity.
Q: Capital
ANS 🗹🗹: Money used to make an investment, produce a product, fund operations,
and generate income.
Q: Cost of Goods Sold
ANS 🗹🗹: The cost a company pays for the goods it sells; it includes the cost of the
raw materials along with the direct labor and manufacturing costs used to produce
the goods.
Q: Earnings Before Interest and Taxes (EBIT)
ANS 🗹🗹: Operating Income minus non-operating income and non-operating
expenses; also calculated as Net Income Plus Interest and Taxes.
Q: Gross Profit
ANS 🗹🗹: Calculated as Revenue minus Cost of Goods Sold.
Q: Income
ANS 🗹🗹: All money received from doing business, including sales revenue and
other income.
Q: Interest Expense
ANS 🗹🗹: Money spent to pay for borrowed money - interest payable on loans,
bonds, lines of credit; it is calculated as the interest rate times the outstanding
principal amount of the debt.
