Adventis FMC Level 1 questions with answers

Adventis FMC Level 1 questions with answers |/ |/ |/ |/ |/ |/




financial statement communicates what? - CORRECT ANSWERS
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✔✔- financial condition
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- results of operations
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- various other activities of an organization
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how board of directors use financial data... - CORRECT ANSWERS
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✔✔- hold management accountable - make board-level decisions
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about corporate strategy
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how company management uses financial data... - CORRECT
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ANSWERS ✔✔- measure performance
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- make strategic, operating and financial decisions
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how creditors use financial data... - CORRECT ANSWERS ✔✔-
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measure creditworthiness
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- liquidity
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- bankruptcy risk
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how investors use financial data... - CORRECT ANSWERS ✔✔make
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decisions on buying/selling equity investments
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how acquirers use financial data... - CORRECT ANSWERS ✔✔-
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determine valuation
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,- make investment decisions
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how regulators use financial data... - CORRECT ANSWERS
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✔✔determine whether company is operating according to
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regulations/law
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what does the income statement present? - CORRECT ANSWERS
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✔✔results of operations over a period of time
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what is the purpose of the income statement? - CORRECT
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ANSWERS ✔✔to show whether the company made or lost money
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during the period reported
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what does the income statement indicate? - CORRECT ANSWERS
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✔✔how revenues are translated into net income through
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subtracting expenses
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revenue (sales) - CORRECT ANSWERS ✔✔amount charged for the
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delivery of goods or services
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cost of sales (cogs) - CORRECT ANSWERS ✔✔- direct cost of
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producing revenue
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- Ex: raw materials, direct wages, etc.
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gross profit - CORRECT ANSWERS ✔✔- revenue - cogs
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- indicates how efficiently labor and materials are used in the
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production process
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, operating expenses - CORRECT ANSWERS ✔✔- all other expenses
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required to run a business
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- Ex: management salaries, marketing, travel, etc.
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operating income (EBIT) - CORRECT ANSWERS ✔✔- revenue -
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cogs - operating expenses
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- indicates a company's earning power from ongoing operations
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non-operating expenses - CORRECT ANSWERS ✔✔- expenses not |/ |/ |/ |/ |/ |/ |/


related to regular business of the company
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- Ex: interest expense, restructuring expense, etc.
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corporate taxes - CORRECT ANSWERS ✔✔local and federal
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income taxes the company incurs
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net income (net earnings) - CORRECT ANSWERS ✔✔- revenue -
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cogs - operating expenses - non-operating expenses - taxes
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- indicates increase in shareholders' value resulting from
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operations
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what does the balance sheet show? - CORRECT ANSWERS ✔✔an
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organization's financial position at a particular point in time
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what does the balance sheet disclose? - CORRECT ANSWERS ✔✔-
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the resources an organization controls (assets)
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- the claims on those resources (liabilities and equity)
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