Check your understanding

Answer all 5 questions, then check your answers. You need 4 correct to pass and unlock your certificate. You can try as many times as you like.

Question 1 of 5Which statement shows whether a business made a profit over a period of time?

Balance sheetIncome statementBank statementBusiness plan

Question 2 of 5Which statement is a snapshot of what a business owns and owes on a single date?

Income statementCash flow statementBalance sheetBudget

Question 3 of 5Revenue is $200,000 and cost of goods sold is $120,000. What is the gross margin?

60%40%20%80%

Question 4 of 5Current assets are $50,000 and current liabilities are $25,000. What is the current ratio?

0.51.02.025,000

Question 5 of 5Why can a profitable business run short of cash?

Profit is always the same as cashCash can be tied up in inventory, unpaid invoices and loan repaymentsTaxes are never paid in cashThe balance sheet hides cash

You need 4 out of 5 to pass.