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Do you know the difference between income and profit? Do you know what an operating expense is? Do you know how to calculate net income?

To mark Financial Inclusion week, the Foundation is challenging you to test your financial literacy skills. This short video is part of the bespoke financial literacy training curriculum we have developed as part of our Road to Women’s Business Growth project in Nigeria. Working in partnership with the ExxonMobil Foundation, the Enterprise Development Centre of Pan-Atlantic University, Emerging360 and Diamond Bank, we are supporting 500 women entrepreneurs to boost their financial literacy skills and enhance their access to capital.

Watch the video and then test your knowledge by taking the quiz below. Good luck!

 

Financial literacy quiz

Question 1

Which of the following is NOT true about the income statement:

A. It tells you how much your business earned or lost over a period of time

Not quite. This statement is accurate. B is the correct answer.

B. It’s the one tool you need to understand your business’s financial health

Correct! To understand your financial health, you need to look at other financial statements too.

C. It shows the efficiency of your business

Not quite. This statement is accurate. B is the correct answer.


Question 2

Read the following income statement:

Income statement

Choose the best answer:

A. During the year, the business made 11,892 in sales

Not quite. While this answer is correct, it’s not the only one that’s correct. E is the best answer.

B. The profit left after deducting the costs incurred to make the products that were sold is not enough to cover operating expenses

Not quite. While this answer is correct, it’s not the only one that’s correct. E is the best answer.

C. The business made a loss during the year

Incorrect. E is the best answer.

D. During the year, the business spent a total of 12,045 for its operations

Incorrect. E is the best answer.

E. A and B are correct

Correct!

F. All statements are correct

Not quite. Answers C and D are not correct. E is the best answer.

 

Question 3

Which of the following is NOT an operating expense:

A. Salaries for accountants and other staff

Incorrect. Salaries for accountants and other staff are operating expenses. The correct answer is D.

B. Rental costs

Incorrect. Rental costs are operating expenses. The correct answer is D.

C. Marketing costs

Incorrect. Marketing costs are operating expenses. The correct answer is D.

D. Money paid to suppliers for materials you used to produce the goods you sold

Correct! Money paid to suppliers is a cost of goods sold. It is money paid to buy or create the products you sold.

 

Question 4

The ‘bottom line’ refers to:

A. Total revenue

Incorrect. The correct answer is B

B. NET income

Correct!

C. Income before income tax

Incorrect. The correct answer is B

 

How did you do? Tweet your score and encourage others to test their knowledge:

I got one out of four 

I got two out of four 

I got three out of four 

I got four out of four 

 

Find out how women entrepreneurs from our Road to Women’s Business Growth project have benefitted from the training they received – watch the short films here.

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Comments
  • PK
    Reply

    Absolutely enjoyed how you broke down how to read an income statement — thank you.

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