Financial Transactions and Impact on Financial Statements Quiz
Test your knowledge on financial statements, cash flows, assets, and liabilities with this quiz on financial accounting.
#1
Which financial statement reports a company's revenues and expenses over a period of time?
Balance Sheet
Income Statement
Cash Flow Statement
Statement of Retained Earnings
#2
What does the term 'accounts receivable' represent in financial accounting?
Money owed to suppliers
Money owed by customers
Money invested in stocks
Money held in cash reserves
#3
Which financial statement reports a company's cash inflows and outflows during a specific period?
Balance Sheet
Income Statement
Cash Flow Statement
Statement of Changes in Equity
#4
Which financial statement summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time?
Balance Sheet
Income Statement
Cash Flow Statement
Statement of Retained Earnings
#5
What is the purpose of the Statement of Cash Flows?
To report the financial position of a company at a specific point in time
To report the changes in a company's equity over a period of time
To report a company's cash inflows and outflows during a specific period
To report a company's revenues and expenses over a period of time
#6
Which of the following is not an example of a cash flow from investing activities?
Purchase of property, plant, and equipment
Proceeds from issuing bonds
Sale of investments
Purchase of marketable securities
#7
In financial accounting, what does the term 'amortization' refer to?
Decrease in the value of intangible assets over time
Increase in the value of tangible assets over time
Distribution of dividends to shareholders
Recording revenue at the time it is earned
#8
What is the formula to calculate Return on Assets (ROA)?
Net Income / Average Total Assets
Net Income / Total Assets
Net Income / Average Shareholders' Equity
Net Income / Total Liabilities
#9
What does the term 'depreciation' refer to in financial accounting?
Decrease in the value of tangible assets over time
Increase in the value of intangible assets over time
Distribution of dividends to shareholders
Recording revenue at the time it is earned
#10
What does the term 'liquidity' refer to in finance?
The ability to convert assets into cash quickly without significant loss
The ability of a company to meet its long-term financial obligations
The measure of profitability relative to the amount of capital invested
The rate at which an investment grows over time
#11
If a company issues additional shares of common stock, how does it affect the financial statements?
Decreases total assets and total equity
Increases total assets and total equity
Decreases total assets and increases total equity
Increases total assets and decreases total equity
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