Resources Online Training How to Prepare an Income Statement Name* First Last Email* 1. What is the first thing that goes on every income statement?* Cost of Goods Sold Sales Revenue Wages Payable Wages Expense 2. Sales Revenue is what you earn from making sales through product and services.* True False 3. _____ is the profit you have before you deduct additional expenses.* Gross Profit Cost of Goods Sold Investment Profit None of the Above 4. The biggest expense on an income statement will be either the Cost of Goods Sold or the Cost of Services Sold.* False True 5. Gross Profit minus Total Operating Expense equals _____.* Non-Operating Income Cost of Goods Sold Operating Income None of the above 6. How does one calculate “Income Before Income Taxes”?* Operating Expense minus Wages Expense Operating Income minus Interest Expense Operating Income plus Wages Expense Operating Income plus Interest Expense 7. Income Before Income Taxes minus Income Tax Expense equals Net Income.* False True 8. Operating Expenses are the expenses related to the daily operations of a business.* True False 9. When creating an income statement your Debit and Credit Totals will never equal.* False True 10. Income Before Income Taxes _____ by the Tax Rate equals Income Tax Expense.* Subtracted Divided Multiplied None of the Above This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.