Business managements Multiple Choice Questions

What financial statement lists assets from current to long term?

• balance sheet

• income statement

• cash flow statement

• statement of retained earnings

Net income equals:

• total revenue minus cost of goods sold

• total revenue minus total expenses

• operating revenue minus operating expenses

• revenue minus expenses plus income taxes

Which is not a cash activity listed on the cash flow statememt?

• operating activity

• investing activity

• purchasing activity

• financing activity

What financial ratio helps management evaluate profits available for dividends?

• retention rate

• debt ratio

• debt service coverage ratio

• cash ratio

Earnings per share shows investors the __________ earned per outstanding share of stock.

• operating income

• income before taxes

• net income

• income before interest and taxes

The profit margin ratio measures the _______________ earned from each dollar of sales.

• operating income

• net income

• income before taxers

• income before interest and taxes

An income statement is based on the profit and loss account.

• True

• False

A balance sheet is like a photo of a company at a particular point in time.

TrueYes, this is

• true.

• False

A profit and loss statement shows how much cash (or cash equivalents) enters and leaves a company.

• True

• False

Cash flow statements help you determine the net worth of a company.

• True

• False