Financial Planning - learn how with our online computer training Online Computer Course from Competence Software                             

Welcome to our Financial Statement Basics quiz.

The full Financial Competence course thoroughly covers how to read, understand, analyze and construct financial statements and would make you competent in answering these and hundreds more questions about business finance basics. There is no grade for this quiz. If, after taking this quiz, you feel that your knowledge of the basics (or the knowledge of someone you want to train) can improve, click on the "Finance" button, check out the data, contact us and we will be delighted to help. Please use the glossary for the definition of any financial terms that you do not fully understand.

1. Financial Statements are reports on the financial performance of organizations. They provide data on:
A) Projections for the upcoming fiscal year
 B) Where money comes from, what money is spent on and how much money is available for use
C) Comparative company data to companies in similar industries
 D) All of the above
 E) None of the above
2. The primary function of the Income Statement is to:
A) Show the company's value as of a given point in time
 B) Determine if the company will have enough cash to operate properly
 C) Determine taxes owed or not owed
 D) Compare the company's assets against the company's liabilities
 E) Measure the company's financial performance over a period of time
3. The primary function of the Balance Sheet is to:
A) Measure the company's performance over a period of time
 B) Make sure that the company's assets and the company's liabilities "balance"
 C) Determine taxes owed or not owed
 D) Show the company's value as of a given point in time
 E) Determine if the company will have enough cash to operate properly
4. The main three sections of the Cash Flow Statement are:
A) Cash from operating activities; cash from investing activities and cash from financing activities
 B) Cash from operating activities; cash from sales and cash from administrative activities
 C) Cash from assets; cash from liabilities and cash from equity
 D) Cash from sales; cash from operations and cash from depreciation and amortization
 E) Cash from customers; cash from shareholders and cash from miscellaneous sources
5. Which of the following lists are all Assets found in the Balance Sheet:
A) Cash, accounts receivable, marketable securities, inventory, prepaid expenses and common stock
 B) Cash, accounts receivable, marketable securities, inventory and prepaid expenses
 C) Cash, accounts receivable, inventory and Operating Margin
 D) Cash, accounts receivable, inventory, prepaid expenses and revenue
 E) Cash, accounts receivable, inventory, marketable securities and revenue
6. The Balance Sheet equation is:
A) Assets divided by Equity = Liabilities
 B) Assets plus Liabilities = Equity
 C) Assets = Liabilities plus Equity
 D) Equity = Profit minus Taxes
 Liabilities = Assets plus Equity
7. Which one of the following lists are the Current Liabilities of a company:
A) Accounts Payable, Notes Payable, Accrued Expenses AND Income Taxes Payable
 B) Accounts Payable, Notes Payable, Accrued Expenses AND Prepaid Expenses
 C) Accounts Payable, Notes Payable, Accrued Expenses BUT NOT Income Taxes Payable
 D) Accounts Payable, Notes Payable, Income Taxes Payable BUT NOT Accrued Expenses
E) Accounts Payable, Notes Payable AND Prepaid Expenses
8. Which is correct about Preferred Stock:
A) It is reserved only for preferred customers or investors
 B) It is always worth more than common stock
 C) It always costs more than common stock
 D) It has priority over common stock in the event of the dissolution of the company
 E) It cannot be owned by full time employees of the company
9. Which one of the below is the MAJOR responsibility of a businessperson:
A) Making as little income as possible that is taxable in order to minimize the government's cut
 B) Making as much money as possible for the employees to share in salary, bonus and benefits
 C) Making sure the company is legally compliant with all reporting and other regulatory requirements
 D) Making as much money as possible to distribute in dividends to stockholders
 E) Making the value of the company increase by generating increasing revenues and profits
10. Which is the most relevant statement to an employee regarding the understanding and use of financial statements:
A) They are only really needed by a company's Chief Financial Officer or Controller or Accounting Staff who are paid to understand and use these things
 B) They have little to do with the "real life" day to day operations of most departments or sections
 C) They can help any employee understand her or his impact on the financial health of the company
 D) They are only really used to determine taxes owed or not owed.
E) They are only really needed by senior executives, board members and shareholders

Return to Top

 

 

Competence Software - Phone: 727-298-0341

Home | Finance | Investment | Technology | Word Gems | Glossary
Company | Contact Us | Store | Partners | Additional Resources | Site Map | Your Privacy

Copyright © 2001 Competence Software Inc. - All Rights Reserved

Press Releases

Download Demo
Home Page of Competence Software
Financial Competence - learn about business finance online
Investment Competence - learn about investments and financial planning online
Understanding Computers - learn about technology online
Word Gems - animated demonstrations of computer, finance and investing terms.
Glossary of Business Finance and Investment Terms
About our Company and computerized learning tools
List of Clients using our Financial Literacy courses
How to contact us.
Buy from our online store
Partners of Competence Software
Additional Resources