Unit 7 Practice

Financial Statements are reports on the financial performance of organizations. They provide data on:

• Projections for the upcoming fiscal year

• Where money comes from, what money is spent on and how much money is available for use

• Comparative data on similar companies

• All of the above

The primary function of the Income Statement is to:

• Show the company's value as of a given point in time

• Determine if the company will have enough cash to operate properly

• Measure the company's financial performance over a period of time

• Compare the company's assets against the company's liabilities

The primary function of the Balance Sheet is to:

• Measure the company's performance over a period of time

• Make sure that the company's assets and the company's liabilities "balance"

• Determine taxes owed or not owed

• Show the company's value as of a given point in time

The three main sections of the Cash Flow Statement are:

• Cash from operating activities; cash from investing activities and cash from financing activities

• Cash from operating activities; cash from sales and cash from administrative activities

• Cash from assets; cash from liabilities and cash from equity

• Cash from sales; cash from operations and cash from depreciation and amortization

Which of the following is NOT an Asset found in the Balance Sheet:

• Cash

• Sales Payable

• Inventory

• Accounts Receivable

The Balance Sheet/Accounting Equation is:

• Assets divided by Equity = Liabilities

• Assets plus Liabilities = Equity

• Assets = Liabilities plus Equity

• Equity = Profit minus Taxes

Which one of the following is NOT a liability of a company:

• Accounts Payable

• Notes Payable

• Accrued Expenses

• Inventory

Expenses that change as the amount of product you produce changes are called what?

• Fixed Cost

• Variable Cost

• Changing Cost

• Cost of Goods Sold

Debts owed by a firm to an outside organization or individual are called what?

• Assets

• Fixed Costs

• Liabilities

• Equity

Funds due from customers who have purchased on credit are called what?

• Accounts Receivable

• Equity

• Accounts Payable

• Cash Flow