Adventis FMC Level 1 MC UPDATED
Exam Questions and CORRECT Answers
only
what is the purpose of the income statement?
What does it indicate? - Correct Answer- to show stakeholders if the firm made or lost money
during the period being reported
it indicates how revenues are transformed into net income
define:
Revenue - Correct Answer- the amount charged for the delivery of goods and services
define:
COGS - Correct Answer- direct costs of producing revenue
define:
Operating Expense - Correct Answer- all other expenses required to run the business
what does Operating Income indicate?
-what is the other word for it? - Correct Answer- Op income indicates a company's earnings
power from ongoing operations
Another work for Operating profit is EBIT
what does net profit indicate for the shareholder? - Correct Answer- indicates the increase in
shareholder value resulting from the operations of the firm
, list the general flow of the income statement - Correct Answer- revenue
(COGS)
Gross Profit
(Operating expense)
Operating Income
(non Op Expense)
(Tax)
Net Income
what does the balance sheet show - Correct Answer- it is a financial statement that represents
the financial position of the company on a particular date
Balance sheet:
Assets are what the company _____, Liabilities are what the company _____, and equity is
the ------ ------- of shareholders against the company - Correct Answer- Assets are what the
company owns, Liabilities are what the company owes, and equity is the Remaining Claims
of shareholders against the company
Define:
Debt
which statement is it found on? - Correct Answer- the amount of obligations owed to
creditors
It is found on the balance sheet
Define:
Equity
which statement is it found on? - Correct Answer- Equity is the cumulative shareholder
investments + cumulative net earnings
Exam Questions and CORRECT Answers
only
what is the purpose of the income statement?
What does it indicate? - Correct Answer- to show stakeholders if the firm made or lost money
during the period being reported
it indicates how revenues are transformed into net income
define:
Revenue - Correct Answer- the amount charged for the delivery of goods and services
define:
COGS - Correct Answer- direct costs of producing revenue
define:
Operating Expense - Correct Answer- all other expenses required to run the business
what does Operating Income indicate?
-what is the other word for it? - Correct Answer- Op income indicates a company's earnings
power from ongoing operations
Another work for Operating profit is EBIT
what does net profit indicate for the shareholder? - Correct Answer- indicates the increase in
shareholder value resulting from the operations of the firm
, list the general flow of the income statement - Correct Answer- revenue
(COGS)
Gross Profit
(Operating expense)
Operating Income
(non Op Expense)
(Tax)
Net Income
what does the balance sheet show - Correct Answer- it is a financial statement that represents
the financial position of the company on a particular date
Balance sheet:
Assets are what the company _____, Liabilities are what the company _____, and equity is
the ------ ------- of shareholders against the company - Correct Answer- Assets are what the
company owns, Liabilities are what the company owes, and equity is the Remaining Claims
of shareholders against the company
Define:
Debt
which statement is it found on? - Correct Answer- the amount of obligations owed to
creditors
It is found on the balance sheet
Define:
Equity
which statement is it found on? - Correct Answer- Equity is the cumulative shareholder
investments + cumulative net earnings
