Business Services Business Services 4

Question 1

Which financial statement shows a company's revenues and expenses over a specific period of time?

Accepted Answer

Income statement (P&L)

Answer

The income statement, also called the profit and loss (P&L) statement, summarizes revenues, costs, and expenses during a specific accounting period.

Question 2

What is the main difference between gross profit and net profit?

Accepted Answer

Net profit subtracts all operating expenses and taxes from gross profit

Answer

Gross profit is revenue minus cost of goods sold, while net profit further subtracts all operating expenses, interest, and taxes.

Question 3

A business signs a contract requiring it to provide services for 12 months. Under accrual accounting, when should revenue be recognized?

Accepted Answer

Ratably as services are performed each month

Answer

Under accrual accounting and ASC 606, revenue is recognized over time as performance obligations are satisfied, not when cash is received.

Question 4

Which type of market research involves collecting new, original data through surveys or interviews?

Accepted Answer

Primary research

Answer

Primary research gathers new data directly from sources through methods like surveys, focus groups, and interviews, unlike secondary research which uses existing data.

Question 5

An LLC operating agreement typically defines all of the following EXCEPT:

Accepted Answer

Stock ticker symbol on the NYSE

Answer

LLCs do not issue publicly traded stock or have stock tickers; the operating agreement governs internal ownership and management arrangements.

Business Services Practice Test

Business Services Practice Test

Business Services Business Services 4