You're starting your own business and learning how to make it profitable. Now it's time to test your knowledge of the two key financial terms you'll need to run that business: operating income and gross income.
Question 1 of 20
In business operations terms, what does COGS stand for?
Question 2 of 20
If you owned a sneaker company, which of these would be considered a cost of goods sold (COGS)?
Question 3 of 20
Which of the following would NOT be considered an operating expense?
Question 4 of 20
Operating income means the same thing as EBIT, which stands for:
Question 5 of 20
Operating income is calculated as:
Question 6 of 20
Which is a more accurate way to measure a company's profitability?
Question 7 of 20
What is another name for gross income?
Question 8 of 20
How would you calculate gross income?
Question 9 of 20
True or false: Gross income includes salaries and office supplies.
Question 10 of 20
A company with a high gross margin is said to be very:
Question 11 of 20
If a table manufacturer's revenue is $500 per table and it spends $200 to produce each table, as well as $25 in salaries and $25 in office expenses, what is the manufacturer's gross income?
Question 12 of 20
What would that same table manufacturer's operating income be if it makes $500 per table and spends $200 to produce each table, $25 in salaries, and $25 in office expenses?
Question 13 of 20
In 2002, IBM reported the profit from the sale of a subsidiary company as operating income. Is the sale of a company considered operating income?
Question 14 of 20
The amount of money a car manufacturing company earns from selling its automobiles is called:
Question 15 of 20
What is the term used to describe the decrease in value of a company's equipment over time?
Question 16 of 20
If a corporation is selling picnic baskets for $50, current sales are 10,000 units, and the costs are $10 per unit, how much will the operating income change if sales increase by another 10,000 units?
Question 17 of 20
A company's income statement summarizes that company's expenses and revenues at a specific moment in time. True or false?
Question 18 of 20
True or false? Cutting your company's prices to boost sales will increase your gross profit.
Question 19 of 20
If a vacuum cleaner company's operating income decreases, but its gross income stays the same, the company might have:
Question 20 of 20