Financial Reports and Procedures Quiz

What is a budget?

• A report that shows the results of operations for a certain period of time

• A report that shows the condition of a company as of a specific date

• A plan of expected income and expenses for a period of time

• A document that shows incoming and outgoing cash for a given period

What is the purpose of monitoring a budget?

• To increase spending in all categories

• To have excessive cash on the current account

• To watch expenses and make cuts as needed

• To ignore monthly, quarterly and yearly budgets

What does an income statement show?

• The condition of a company as of a specific date

• The results of operations for a certain period of time

• Incoming and outgoing cash for a given period

• Assets, liabilities, and owner’s equity on a certain date

What does net income represent?

• A net loss if revenues are greater than expenses

• Profit if the revenues are greater than expenses

• A net loss if expenses are greater than revenues

• Profit if expenses are greater than revenues

What is included in the assets of a company?

• The debts the company owes

• The owner’s share of the worth of the firm

• All the goods and property owned by the firm

• Debts the company owes

What is the purpose of a cash flow statement?

• To show the condition of a company as of a specific date

• To show the results of operations for a certain period of time

• To show incoming and outgoing cash for a given period

• To show the assets, liabilities, and owner’s equity on a certain date

What is the purpose of leaving a one-inch margin at the top and bottom on both sides of financial documents?

• To have enough cash to pay employees and meet bills

• To center the lines in the statement heading, company name, and date(s)

• To indicate addition or subtraction

• To improve the formatting and readability

What is the purpose of using a single line (bottom border) underneath the last figure in financial documents?

• To improve the formatting and readability

• To have enough cash to pay employees and meet bills

• To center the lines in the statement heading, company name, and date(s)

• To indicate addition or subtraction

What is the purpose of using double lines (double bottom border) underneath a final column total in financial documents?

• To improve the formatting and readability

• To have enough cash to pay employees and meet bills

• To center the lines in the statement heading, company name, and date(s)

• To indicate addition or subtraction

What is the purpose of using the dollar sign with the first figure of each new column of figures to be added or subtracted in financial documents?

• To indicate addition or subtraction

• To improve the formatting and readability

• To center the lines in the statement heading, company name, and date(s)

• To have enough cash to pay employees and meet bills