FINHUB

Which financial statement gives the income and expenditures for a given time frame, such as a month or a year?

• Balance Sheet

• Income Statement

• Cash Flow Statement

What does the Principle of Conservatism state?

• Overstate assets and income to attract investors

• Recognize expenses and liabilities at the early stages even if there is uncertainty about the outcome

• Recognize gains immediately, even if they are not realized

• Understate liabilities to show financial strength

What type of account is Unearned Revenue ?

• Shareholders’ Fund

• Assets

• Liability

What is the Written Down Value (WDV) method of depreciation?

• A method where the asset's original cost is spread evenly over its useful life.

• A method where depreciation is a fixed percentage of the asset's current book value.

• A method where depreciation is calculated based on the asset's market value.

• A method where the asset's book value remains constant throughout its useful life.

What does the term "Capital Structure" refer to in finance?

• Allocation of acquired finance in the company

• Combination of current assets & current liabilities

• The allocation of funds for day-to-day operational expenses

• The mix of a company's long-term debt, preferred equity, and common equity.

What does Market Capitalization (Market Cap) imply in the context of stocks?

• The total number of shares traded in the market.

• The total value of a company's outstanding shares in the stock market.

• The ratio of a company's earnings to its share price.

• The annual interest rate paid on a stock investment.

How is a stock differentiated from a bond?

• Stocks represent ownership in a company, while bonds represent a form of debt.

• Stocks pay fixed interest, while bonds offer potential for capital gains.

• Stocks have a maturity date, while bonds do not.

• Stocks provide a guaranteed return, while bonds involve higher risk.

What does per capita income represent?

• The total income of a country.

• The average income earned per person in a specific area.

• The total revenue generated by a company.

• The net profit per share for a corporation.

Under what circumstance can we say the company is facing a situation of financial distress?

• When the company's stock prices are consistently rising.

• When the company has a high market capitalization.

• When the company is unable to meet its financial obligations and debt payments.

• When the company's revenue is increasing.

What is the consumption function in economics?

• The process of producing goods and services for final consumption.

• The relationship between consumer spending and disposable income.

• The total expenditure on goods and services in an economy.

• The measurement of changes in the price level of goods and services.