Accounting Fundamentals Cfi Test With Revised
Answers 2025-26 #10
What are the 3 components of a balance sheet? - correct answer Assets = Liabilities +
Equity
What are the three components of an income statement? - correct answer Revenues
Expenses
Profit or loss
What are the three components of a cash flow statement? - correct answer Operating
Investing
Financing
What are the components of Assets on the Balance sheet? - correct answer Current -
used in a year
Noncurrent - used longer than a year
How are non current assets broken into 2 categories? - correct answer Tangible and
non tangible
What are the components of Liabilities on the balance sheet? - correct answer Current
and noncurrent.
What are retained earnings? - correct answer Total profit ever earned - (all losses &
dividends)
What are the two ways to balance a balance sheet? - correct answer 1. Double entry
once on the assets and once on the liabilities.
2. Twice on the same side one as a positive and one as a negative.
How is an income statement constructed? - correct answer Revenue - operating
expenses = Gross Profits -Indirect Operating costs = Operating Income - Cost of debt
financing -Tax =Net Income
What are the 3 components of Expenses on the Income Statement? - correct answer
General and Administrative
Research and Development
Sales and Marketing
How is Gross Profit calculated? - correct answer Sales - COGS
, How do you calculate EBIT - correct answer Gross Profit - Expenses
What are the usual 3 components of the Current assets on the balance sheet?
What are the usual 2 components of the long term asssets? - correct answer 1. Cash
2. AR (Accounts Receivable)
3. Inventory
1. Building
2. Machinery
What happens to the balance sheet when a company sells on credit?
What if it buys inventory on credit? - correct answer Increase Share holders Equity
Revenue
Increase Current Assets Accounts receivable
Current liabilities increases
Assets Inventory Increases
Where are the AR located on the balance sheet? - correct answer Current Assets
What Does a credit mean on balance sheet? - correct answer Right.
Increases a liability or equity account, or decreases an asset or expense account.
What does debit mean on the balance sheet? - correct answer Left.
Increases an asset or expense account, or decreases a liability or equity account
What are the components of shareholders equity on the balance sheet?
What are their subcatagories? - correct answer Common shares and retained earnings.
Retained earnings is made up of:
Revenue
COGS
Expenses
What is deferred revenue? - correct answer Cash received before revenue is earned
What are the 8 components of the income statement? - correct answer Revenues
- Direct Operating costs
*Gross Profit*
-Indirect operating costs (COGS)
*Operating Income*
- Cost of debt finance
-Tax
Answers 2025-26 #10
What are the 3 components of a balance sheet? - correct answer Assets = Liabilities +
Equity
What are the three components of an income statement? - correct answer Revenues
Expenses
Profit or loss
What are the three components of a cash flow statement? - correct answer Operating
Investing
Financing
What are the components of Assets on the Balance sheet? - correct answer Current -
used in a year
Noncurrent - used longer than a year
How are non current assets broken into 2 categories? - correct answer Tangible and
non tangible
What are the components of Liabilities on the balance sheet? - correct answer Current
and noncurrent.
What are retained earnings? - correct answer Total profit ever earned - (all losses &
dividends)
What are the two ways to balance a balance sheet? - correct answer 1. Double entry
once on the assets and once on the liabilities.
2. Twice on the same side one as a positive and one as a negative.
How is an income statement constructed? - correct answer Revenue - operating
expenses = Gross Profits -Indirect Operating costs = Operating Income - Cost of debt
financing -Tax =Net Income
What are the 3 components of Expenses on the Income Statement? - correct answer
General and Administrative
Research and Development
Sales and Marketing
How is Gross Profit calculated? - correct answer Sales - COGS
, How do you calculate EBIT - correct answer Gross Profit - Expenses
What are the usual 3 components of the Current assets on the balance sheet?
What are the usual 2 components of the long term asssets? - correct answer 1. Cash
2. AR (Accounts Receivable)
3. Inventory
1. Building
2. Machinery
What happens to the balance sheet when a company sells on credit?
What if it buys inventory on credit? - correct answer Increase Share holders Equity
Revenue
Increase Current Assets Accounts receivable
Current liabilities increases
Assets Inventory Increases
Where are the AR located on the balance sheet? - correct answer Current Assets
What Does a credit mean on balance sheet? - correct answer Right.
Increases a liability or equity account, or decreases an asset or expense account.
What does debit mean on the balance sheet? - correct answer Left.
Increases an asset or expense account, or decreases a liability or equity account
What are the components of shareholders equity on the balance sheet?
What are their subcatagories? - correct answer Common shares and retained earnings.
Retained earnings is made up of:
Revenue
COGS
Expenses
What is deferred revenue? - correct answer Cash received before revenue is earned
What are the 8 components of the income statement? - correct answer Revenues
- Direct Operating costs
*Gross Profit*
-Indirect operating costs (COGS)
*Operating Income*
- Cost of debt finance
-Tax
