Adventis FMC Level 1 MC Practice
UPDATED Actual Exam Questions and
CORRECT Answers
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
UPDATED Actual Exam Questions and
CORRECT Answers
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
