FIN 340 - Financial Management UPDATED
ACTUAL Exam Questions and CORRECT
Answers
Financial information _______ from one statement to the next. - CORRECT ANSWER -
flows
This shows the firm's performance over a specific period of time and sales/expenses. -
CORRECT ANSWER - The income statement.
If expenses are less than sales, you have net _______. If expenses are greater than sales, you
have net _______. - CORRECT ANSWER - profitability; loss
What are the 4 financial statements? - CORRECT ANSWER - * Balance sheet
* Income statement
* Cost flows statement
* Owners equity statement
Operating profit on the income statement is also known as... - CORRECT ANSWER -
EBIT (earnings before interest and taxes)
Which financial statement captures a specific point in time? - CORRECT ANSWER -
Balance sheet
Which financial statement captures information over a lapse in time? - CORRECT
ANSWER - Income statement
What is the critical accounting tenet? Hint: it's an equation used for the balance sheet. -
CORRECT ANSWER - Assets = Liabilities + Owner's Equity
, Liabilities are what? - CORRECT ANSWER - Funds owed to creditors like banks,
suppliers, and employees.
What are the two types of owner's equity? - CORRECT ANSWER - Contributed capital
Earned capital
What's the difference between contributed and earned capital? - CORRECT ANSWER -
Contributed capital - assets from owners/shareholders
Earned capital - earnings retained from
Assets are listed in order of how ________ they are; in descending order. - CORRECT
ANSWER - liquid
Assets are broken down into two categories. What are they? - CORRECT ANSWER -
Current - can be converted to cash within a year
Noncurrent - cannot be converted to cash within a year
Stockholder's equity is the difference between what two things? - CORRECT ANSWER -
Total assets minus total liabilities
What are the three types of stockholder's equity? - CORRECT ANSWER - Common/paid-
in surplus - claim in ownership of a company
Preferred - hybrid security
Retained earnings - kept by the company instead of going to dividends
This measures how well a company can pay debts as they come due - CORRECT
ANSWER - Net working capital
Healthy firms have _______ net working values - CORRECT ANSWER - positive
ACTUAL Exam Questions and CORRECT
Answers
Financial information _______ from one statement to the next. - CORRECT ANSWER -
flows
This shows the firm's performance over a specific period of time and sales/expenses. -
CORRECT ANSWER - The income statement.
If expenses are less than sales, you have net _______. If expenses are greater than sales, you
have net _______. - CORRECT ANSWER - profitability; loss
What are the 4 financial statements? - CORRECT ANSWER - * Balance sheet
* Income statement
* Cost flows statement
* Owners equity statement
Operating profit on the income statement is also known as... - CORRECT ANSWER -
EBIT (earnings before interest and taxes)
Which financial statement captures a specific point in time? - CORRECT ANSWER -
Balance sheet
Which financial statement captures information over a lapse in time? - CORRECT
ANSWER - Income statement
What is the critical accounting tenet? Hint: it's an equation used for the balance sheet. -
CORRECT ANSWER - Assets = Liabilities + Owner's Equity
, Liabilities are what? - CORRECT ANSWER - Funds owed to creditors like banks,
suppliers, and employees.
What are the two types of owner's equity? - CORRECT ANSWER - Contributed capital
Earned capital
What's the difference between contributed and earned capital? - CORRECT ANSWER -
Contributed capital - assets from owners/shareholders
Earned capital - earnings retained from
Assets are listed in order of how ________ they are; in descending order. - CORRECT
ANSWER - liquid
Assets are broken down into two categories. What are they? - CORRECT ANSWER -
Current - can be converted to cash within a year
Noncurrent - cannot be converted to cash within a year
Stockholder's equity is the difference between what two things? - CORRECT ANSWER -
Total assets minus total liabilities
What are the three types of stockholder's equity? - CORRECT ANSWER - Common/paid-
in surplus - claim in ownership of a company
Preferred - hybrid security
Retained earnings - kept by the company instead of going to dividends
This measures how well a company can pay debts as they come due - CORRECT
ANSWER - Net working capital
Healthy firms have _______ net working values - CORRECT ANSWER - positive
