FIN 461 Test Questions with Verified Correct
Answers
Cash Flow Statement
-Liquidity
-Solvency
-Financial Flexibility
-Shows where investors money goes
Solvency
Ability to meet long term obligations
Balance Sheet
-Assets
-Liabilities
-Equity
Income Statement
-Revenues
-Expenses
-Income
Statement of Comprehensive Income
Includes items that impact owners equity but are not a result of transactions with shareholders
Statement of Changes in Equity
Reports changes in the owners investments in the business over time (ex. paid-in capital,
retained earnings)
, Financial Notes
-Explains information in the major financial statements that are vital to understanding how
they are constructed
-Segment reporting gives details by breaking the statements down into sections of the
company
Managements Discussion and Analysis
-Publicly held companies
-Talks about a variety of issues
-Past results
-Future outlooks
Auditors Reports
Auditors look over financial statements to assure no misstating or errors have occurred
Unqualified Audit
Says that the company has given true and fair financial statements
Qualified Audits
Says most matters have been dealt with fairly other than a few.
Adverse Audit
Says that financial statements doesn't line up with the GAAP
Disclaimer of Opinion
Happens when an auditor is unable to issue an opinion
Possibly due to the scope of limitations
Answers
Cash Flow Statement
-Liquidity
-Solvency
-Financial Flexibility
-Shows where investors money goes
Solvency
Ability to meet long term obligations
Balance Sheet
-Assets
-Liabilities
-Equity
Income Statement
-Revenues
-Expenses
-Income
Statement of Comprehensive Income
Includes items that impact owners equity but are not a result of transactions with shareholders
Statement of Changes in Equity
Reports changes in the owners investments in the business over time (ex. paid-in capital,
retained earnings)
, Financial Notes
-Explains information in the major financial statements that are vital to understanding how
they are constructed
-Segment reporting gives details by breaking the statements down into sections of the
company
Managements Discussion and Analysis
-Publicly held companies
-Talks about a variety of issues
-Past results
-Future outlooks
Auditors Reports
Auditors look over financial statements to assure no misstating or errors have occurred
Unqualified Audit
Says that the company has given true and fair financial statements
Qualified Audits
Says most matters have been dealt with fairly other than a few.
Adverse Audit
Says that financial statements doesn't line up with the GAAP
Disclaimer of Opinion
Happens when an auditor is unable to issue an opinion
Possibly due to the scope of limitations
