MULTIPLE CHOICE SECTION OF ADVENTIS
CERTIFICATION EVALUATION TEST PAPER
COMPLETE QUESTIONS AND SOLUTIONS
●● Board of Directors
Answer: Hold management accountable and make board-level decisions
about corporate strategy
●● Company Management
Answer: Measure performance and make strategic, operating and
financial decisions
●● Creditors
Answer: Measure creditworthiness, liquidity, and bankruptcy risk
●● Investors
Answer: Make decisions on buying or selling equity investments
●● Acquirers
Answer: Determine valuation and make investment decisions
●● Regulators
,Answer: Determine whether the company is operating according to
regulations and the law
●● Income Statement
Answer: - Presents the results of operations over a period of time
- Typically monthly, quarterly, and/or annually
●● What is the purpose of the Income Statement?
Answer: - To show stakeholders whether the company made or lost
money during the period being reported
- It indicates how Revenues are transformed into Net Income
- It displays the Revenues recognized for a specific period of time and
the Expenses charged against those Revenues
●● Revenue (Sales)
Answer: The amount charged for the delivery of goods and services
●● Cost of Sales (Cost of Goods Sold)
Answer: The direct cost of producing revenue (raw materials, direct
wages, etc.)
●● Gross Profit
Answer: - Calculated as Revenue less Cost of Goods Sold
, - Indicates how efficiently labor and supplies are used in the production
process
●● Operating Expenses
Answer: All other expenses required to run the business
- EX: Management Salaries, Marketing, Travel, etc.
●● Operating Income
Answer: Also known as EBIT
- Calculated as Revenue less COGS and Operating Expenses
- Indicates a company's earning power from ongoing operations
●● Non-Operating Expenses
Answer: Expenses or Income not related to the regular business of the
company
- EX: Interest Expense, Restructuring Expenses, etc.
●● Corporate Taxes
Answer: Local and Federal income taxes the company incurs
●● Net Income
Answer: Also called Net Earnings
- Calculated as Revenue less all expenses of the company
CERTIFICATION EVALUATION TEST PAPER
COMPLETE QUESTIONS AND SOLUTIONS
●● Board of Directors
Answer: Hold management accountable and make board-level decisions
about corporate strategy
●● Company Management
Answer: Measure performance and make strategic, operating and
financial decisions
●● Creditors
Answer: Measure creditworthiness, liquidity, and bankruptcy risk
●● Investors
Answer: Make decisions on buying or selling equity investments
●● Acquirers
Answer: Determine valuation and make investment decisions
●● Regulators
,Answer: Determine whether the company is operating according to
regulations and the law
●● Income Statement
Answer: - Presents the results of operations over a period of time
- Typically monthly, quarterly, and/or annually
●● What is the purpose of the Income Statement?
Answer: - To show stakeholders whether the company made or lost
money during the period being reported
- It indicates how Revenues are transformed into Net Income
- It displays the Revenues recognized for a specific period of time and
the Expenses charged against those Revenues
●● Revenue (Sales)
Answer: The amount charged for the delivery of goods and services
●● Cost of Sales (Cost of Goods Sold)
Answer: The direct cost of producing revenue (raw materials, direct
wages, etc.)
●● Gross Profit
Answer: - Calculated as Revenue less Cost of Goods Sold
, - Indicates how efficiently labor and supplies are used in the production
process
●● Operating Expenses
Answer: All other expenses required to run the business
- EX: Management Salaries, Marketing, Travel, etc.
●● Operating Income
Answer: Also known as EBIT
- Calculated as Revenue less COGS and Operating Expenses
- Indicates a company's earning power from ongoing operations
●● Non-Operating Expenses
Answer: Expenses or Income not related to the regular business of the
company
- EX: Interest Expense, Restructuring Expenses, etc.
●● Corporate Taxes
Answer: Local and Federal income taxes the company incurs
●● Net Income
Answer: Also called Net Earnings
- Calculated as Revenue less all expenses of the company
