Financial Management for Project Managers Financial Reporting and Statements

Question 1

Which financial statement shows a company's assets, liabilities, and shareholders' equity at a specific point in time?

Accepted Answer

Balance sheet

Answer

Income statement

Answer

Cash flow statement

Answer

Statement of retained earnings

Question 2

The income statement primarily reports:

Accepted Answer

Revenues, expenses, and net income over a reporting period

Answer

The company's cash position at year end

Answer

Changes in stockholders' equity accounts

Answer

All assets owned and liabilities owed

Question 3

Gross profit on an income statement is calculated as:

Accepted Answer

Net sales minus cost of goods sold

Answer

Net sales minus operating expenses

Answer

Operating income minus interest expense

Answer

Revenue minus all taxes and interest

Question 4

EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is used primarily to measure:

Accepted Answer

Operating profitability and cash-generating ability

Answer

A company's net profit after all deductions

Answer

Total equity available to shareholders

Answer

The company's tax liability for the period

Question 5

On the balance sheet, current liabilities are obligations expected to be settled within:

Accepted Answer

One year or the operating cycle, whichever is longer

Answer

Five years

Answer

Three years

Answer

Two years

Question 6

Which accounting principle requires that revenues be recognized when earned, regardless of when cash is received?

Accepted Answer

Accrual accounting principle

Answer

Matching principle

Answer

Cost principle

Answer

Conservatism principle