Element8 8.1.1 The importance of finance and the management Quiz

What is the primary objective of financial accounting?

• To track business expenses

• To provide financial information to stakeholders

• To manage day-to-day operations

• To reduce taxes

Which of the following is considered a financial statement?

• Balance sheet

• Income statement

• Cash flow statement

• All of the above

What is the main purpose of a balance sheet?

• To show the financial position of a business at a specific point in time

• To provide information about cash inflows and outflows

• To summarise revenue and expenses

• To predict future profits

What does the income statement primarily report?

• Assets and liabilities

• Cash flows

• Revenues and expenses

• Shareholder equity

Which financial statement provides information on a company’s liquidity?

• Income statement

• Balance sheet

• Cash flow statement

• Statement of changes in equity

What is the formula for calculating net profit?

• Revenue - Expenses

• Assets - Liabilities

• Equity + Liabilities

• Revenue + Expenses

Which of the following would be classified as a current asset?

• Buildings

• Machinery

• Inventory

• Bonds payable

What is the primary function of financial management?

• To prepare budgets

• To manage money and financial resources

• To record transactions

Which of the following is a non-current liability?

• Accounts payable

• Short-term loans

• Bonds payable

• Inventory

What does the cash flow statement measure?

• Profitability

• Financial position

• Cash inflows and outflows

• Equity changes