1. When are financial reports required of a company?
A) on December 31
B) on June 30
C) at the end of the firm’s fiscal year
D) at the end of each month
E) weekly
2. If you have a business for the last 10 years and now you planned to open new shop in other location. Since you are short of finance you decided to borrow money from commercial bank. Which financial report is the bank will ask you to present? At what condition of your financial status that the bank is willing to lend you the money you requested?
3. Which of the following shows the net sales, cost of goods sold, and expenses?
A) the balance sheet
B) the income statement
C) the cash flow statement
D) the retained earnings report
E) the owners’ equity statement
4. Which of the following tracks incoming and outgoing money and shows how the firm got and used money?
A) the balance sheet
B) the income statement
C) the statement of cash flows
D) the retained earnings report
E) the owners’ equity statement
5. How does the cost of goods sold affect the gross profit as calculated in an income statement?
A) It helps to predict what future profits will be.
B) It increases the gross profits.
C) It is figured into operating expenses.
D) It does not affect the gross profits.
E) It is subtracted from net sales revenue.
6. What is the main difference between stocks, bonds and preferred stocks? Which one of the three is the least risky investment? Which one has the highest rate of return?
7. What do the Standard & Poor’s and Moody’s bond ratings provide an assessment of?
A) book value
B) risk
C) dividends
D) convertibility
E) SEC compliance
8. Which of the following has the LEAST influence on investors looking to buy stocks?
A) book value
B) dividends
C) interest rate
D) par value
E) market value
