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5 Written questions

5 Matching questions

  1. Forecasts
  2. Income statement
  3. Liquidity
  4. Percent-of-sales method
  5. Long-term liabilities
  1. a a method for expressing each expense item as a percentage of sales.
  2. b an estimate of a firm's future income and expenses, based on its past performance, its current circumstances, and its future plans.
  3. c a company's ability to meet its short-term financial obligations.
  4. d reflects the results of the operations of a firm over a specified period of time.
  5. e include notes or loans that are repayable beyond one year, including liabilities associated with purchasing real estate, buildings, and equipment.

5 Multiple choice questions

  1. the equity invested in the business by the owners plus the accumulated earnings retained by the business after paying dividends.
  2. represents the amount of liquid assets the firm has available.
  3. provides a firm a sense of how its activities will affect its ability to meet its short-term liabilities and how its finances will evolve over time.
  4. a report similar to the annual report except that it contains more detailed information about the company's business.
  5. money owed to it by its customers.

5 True/False questions

  1. Pro forma statement of cash flowsshows the projected flow of cash into and out of the company during a specified period.


  2. Historical financial statementsreflect past performance and are usually prepared on a quarterly and annual basis.


  3. Operating activitiesinclude net income (or loss), depreciation, and changes in current assets and current liabilities other than cash and short-term debt.


  4. Other assetsassets used over a longer time frame, such as real estate, buildings, equipment, and furniture.


  5. Investing activitiesinclude the purchase, sale, or investment in fixed assets, such as real estate, equipment, and buildings.