Question 7: MCQs (1.5 points each): 1. Which financial statement displays the revenues and expenses of a company for a period of time? a) Income statement b) Balance sheet c) Cash flow statement d) Statement of stock holder equity 2. Which account is not a liability account? a) Accounts payable b) Accrued expenses c) Cash d) Notes payable 3. Long term assets without any physical existence but, possessing a value are called a) A) Intangible assets b) B) Fixed assets c) C) Current assets d) D) Investments 4. The assets that can be easily converted into cash within a short period, i.e., 1 year or less are known as a) A) Current assets b) B) Fixed assets c) C) Intangible assets d) D) Investments 5. The debts which are to be repaid within a short period (a year or less) are referred to as, a) A) Current Liabilities b) B) Fixed liabilities c) C) Contingent liabilities d) D) All the above 6. Gross profit is a) A) Cost of goods sold + Opening stock b) B) Sales - cost of goods sold c) C) Sales - Purchases d) D) Net profit - expenses 7. Which of the following equations properly represents a derivation of the fundamental accounting equation? a) Assets + liabilities = owner's equity. b) Assets = owner's equity. c) Cash = assets. d) Assets liabilities = owner's equity. 8. Which of the following would not be included on a balance sheet? a) Accounts receivable. b) Accounts payable. c) Sales. d) Cash