Multiple Choice section of Adventis Certification level 1 Rated A+

Multiple Choice section of Adventis Certification level 1 Rated A+ What are the three financial statements, and what do they do income statement, balance sheet, cf statement they communicate the finanical conditions, results of operations, and other activties of an organization. The three finanical statements provide info to various stakeholders. How does the board of directors use finanical statements? to hold mgmt acountable, make board-level decisions about corporate strategy company mgmt-- how do they use fina statements? to measure performance and make strategic, operating and financial decisions Creditors- how do they use fina statements to measure credit worthiness, liqudity, and bankruptcy risk investors-- how do they use fina statements? to make decisions on buying or selling equity investments acquirers-- how do they use fina statements? to determine valuation and make investment decisions regulators they use fina statements to determine whether the company is operating according to regulations and the law The income statement does what what is its purpose the income statement presents the results of operations (profitability) over a period of time. The purpose of the income statement is to show stakeholders whether the company made or lost money during the period reported. THE INCOME STATEMENT Revenue(sales) is ________. the amount charged for the delivery of goods or services. cogs is the direct cost of producing revenue. (RM, wages, etc.) Gross profit is ___. revenue- cogs it indicates how efficiently lbaor and supplies are used in the production process. operating expenses are all other expenses required to run the business (marketing, travel, mgmt salaries) Operating income, aka ___, is _____. EBIT revenue- cogs-operating expenses it indicates a companies earning power from ongoing operations Non-operating expenses are expenses not related to the regular business of the company. (interest expense, restructuring expense, etc.) Net income//net earnings are Net earnings indicates the revenue- all exepsens of the company increase in shareholder value resulting from operations THE BALANCE SHEET it shows______ at a particular _____. the basic set up is _____. it must balance lol the balance sheet shows an organization's finanical position at a PARTICULAR POINT IN TIME! it shows the resources an organization controls (assets), a