MULTIPLE CHOICE SECTION OF ADVENTIS
CERTIFICATION EXAM SCRIPT VERIFIED
QUESTIONS WITH FULL SOLUTION
●● How does the board of directors use finanical statements?
Answer: to hold mgmt acountable, make board-level decisions about
corporate strategy
●● company mgmt-- how do they use fina statements?
Answer: to measure performance and make strategic, operating and
financial decisions
●● Creditors- how do they use fina statements
Answer: to measure credit worthiness, liqudity, and bankruptcy risk
●● investors-- how do they use fina statements?
Answer: to make decisions on buying or selling equity investments
●● acquirers-- how do they use fina statements?
Answer: to determine valuation and make investment decisions
●● regulators
,Answer: 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
Answer: 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 ________.
Answer: the amount charged for the delivery of goods or services.
●● cogs is
Answer: the direct cost of producing revenue. (RM, wages, etc.)
●● Gross profit is ___.
Answer: revenue- cogs
, it indicates how efficiently lbaor and supplies are used in the production
process.
●● operating expenses are
Answer: all other expenses required to run the business (marketing,
travel, mgmt salaries)
●● Operating income, aka ___, is _____.
Answer: EBIT
revenue- cogs-operating expenses
it indicates a companies earning power from ongoing operations
●● Non-operating expenses are
Answer: expenses not related to the regular business of the company.
(interest expense, restructuring expense, etc.)
●● Net income//net earnings are
Net earnings indicates the
Answer: revenue- all exepsens of the company
increase in shareholder value resulting from operations
●● THE BALANCE SHEET
CERTIFICATION EXAM SCRIPT VERIFIED
QUESTIONS WITH FULL SOLUTION
●● How does the board of directors use finanical statements?
Answer: to hold mgmt acountable, make board-level decisions about
corporate strategy
●● company mgmt-- how do they use fina statements?
Answer: to measure performance and make strategic, operating and
financial decisions
●● Creditors- how do they use fina statements
Answer: to measure credit worthiness, liqudity, and bankruptcy risk
●● investors-- how do they use fina statements?
Answer: to make decisions on buying or selling equity investments
●● acquirers-- how do they use fina statements?
Answer: to determine valuation and make investment decisions
●● regulators
,Answer: 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
Answer: 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 ________.
Answer: the amount charged for the delivery of goods or services.
●● cogs is
Answer: the direct cost of producing revenue. (RM, wages, etc.)
●● Gross profit is ___.
Answer: revenue- cogs
, it indicates how efficiently lbaor and supplies are used in the production
process.
●● operating expenses are
Answer: all other expenses required to run the business (marketing,
travel, mgmt salaries)
●● Operating income, aka ___, is _____.
Answer: EBIT
revenue- cogs-operating expenses
it indicates a companies earning power from ongoing operations
●● Non-operating expenses are
Answer: expenses not related to the regular business of the company.
(interest expense, restructuring expense, etc.)
●● Net income//net earnings are
Net earnings indicates the
Answer: revenue- all exepsens of the company
increase in shareholder value resulting from operations
●● THE BALANCE SHEET
