Financial Statements Quiz

What does the balance sheet show?

• The company's assets and liabilities

• The company's cash flow

• The company's retained earnings

• The company's gross sales

What does the cash flow statement show?

• How money has moved through the business

• The cumulative earnings of the business

• The company's assets and liabilities

• The company's gross profit

What does the statement of retained earnings show?

• Cumulative earnings after dividends

• Total assets of the company

• Net cash flow for the period

• Gross sales and returns

What is the formula for Gross Profit?

• Sales - COGS

• Net Sales - Operating Expenses

• Total Income - Total Expenses

• Sales - Sales Returns

What are cash equivalents?

• Short-term investments easily convertible to cash

• Long-term investments in stocks

• Fixed assets like property and equipment

• Accounts receivable from customers

What is included in the total operating expenses?

• Administrative, Selling & Distribution, Finance Expenses

• Only Administrative Expenses

• Only Selling Expenses

• Only Finance Expenses

What does the net profit after tax represent?

• The profit remaining after all expenses and taxes

• The total revenue of the company

• The gross profit before any deductions

• The total assets of the company

What is the purpose of the vertical balance sheet format?

• To show the sources and applications of funds

• To calculate the net profit

• To summarize cash inflows and outflows

• To detail the income statement

What is the formula for calculating working capital?

• Current Assets - Current Liabilities

• Total Assets - Total Liabilities

• Net Income - Expenses

• Gross Profit - Operating Expenses

What is the primary purpose of the income statement?

• To show the company's profitability over a specific period

• To detail the company's assets and liabilities

• To summarize cash transactions

• To report on shareholder equity