CMA EXAM PART 1: SECTION A questions with correct answers

Primary users of financial statements Correct Answer-- Existing and potential investors - Existing and potential landers and creditors Secondary users of financial statements Correct Answer-- Customers - Employees - Gov. and Regulatory Agencies - the general public Statement of financial position (balance sheet) Correct Answer-An accounting statement that records the values of a business's *assets*, *liabilities* and *shareholders' equity* at one point in time Income Statement Correct Answer-A financial statement that reports a company's revenues and expenses and resulting net income or net loss for a specific period of time. Statement of Cash Flows Correct Answer-Financial statement that reports cash receipts and disbursements related to a firm's three major activities: operations, investments, and financing. Operating Cash Flow (OCF) Correct Answer-the cash flow a firm generates from normal operations—from the production and sale of its goods and services. investing cash flows Correct Answer-cash transactions involving purchase and sale of long-term assets