#1
Which financial statement reports a company's revenues and expenses over a period of time?
Income Statement
ExplanationSummarizes financial performance.
#2
What does the term 'accounts receivable' represent in financial accounting?
Money owed by customers
ExplanationUnpaid customer invoices.
#3
Which financial statement reports a company's cash inflows and outflows during a specific period?
Cash Flow Statement
ExplanationDetails cash movements over time.
#4
Which financial statement summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time?
Balance Sheet
ExplanationSnapshot of financial position.
#5
What is the purpose of the Statement of Cash Flows?
To report a company's cash inflows and outflows during a specific period
ExplanationDetails cash movements for transparency.
#6
Which of the following is not an example of a cash flow from investing activities?
Proceeds from issuing bonds
ExplanationRelates to financing, not investing.
#7
In financial accounting, what does the term 'amortization' refer to?
Decrease in the value of intangible assets over time
ExplanationSystematic write-off of intangible asset value.
#8
What is the formula to calculate Return on Assets (ROA)?
Net Income / Average Total Assets
ExplanationMeasures profit generation efficiency.
#9
What does the term 'depreciation' refer to in financial accounting?
Decrease in the value of tangible assets over time
ExplanationGradual reduction in tangible asset value.
#10
What does the term 'liquidity' refer to in finance?
The ability to convert assets into cash quickly without significant loss
ExplanationAsset conversion speed without value loss.
#11
If a company issues additional shares of common stock, how does it affect the financial statements?
Increases total assets and total equity
ExplanationBoosts both assets and equity.