Financial Statements Quiz
Authored by Kavya Dhir
Financial Education
University
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15 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Why do investment analysts typically want to see a company's financial statements?
To evaluate the business's competitive strategies
To assess the ability of the company to pay taxes
To determine the company's credit rating
To decide whether to recommend the company's securities to clients
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Why might a union request financial statements from a business?
To evaluate the business's competitive strategies
To determine the creditworthiness of the business
To assess the ability to pay compensation and benefits to union members
To decide whether to invest in the business
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
When will the reported results in financial statements be suspicious, potentially due to fraud from the below mentioned cases?
When the results are consistent with industry norms.
When there is a sudden spike in sales.
When the statements are audited.
When non-financial issues are addressed.
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is a key difference between US GAAP and IFRS regarding the treatment of research and development costs?
US GAAP capitalizes all research and development costs and IFRS expenses all research and development costs.
US GAAP expenses all research and development costs and IFRS capitalizes all research and development costs.
Both US GAAP and IFRS expense all research and development costs.
Both US GAAP and IFRS expense research and development costs, however; IFRS capitalizes development costs in certain situations.
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What happens to the values of assets and liabilities in the balance sheet when financial statements are not adjusted for inflation?
They appear inordinately high.
They appear inordinately low.
They remain unchanged.
They become irrelevant.
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the primary purpose of employee's interest in reviewing the financial statements of their current company?
To help employees assess the ability of the enterprise to provide remuneration
To determine the business's credit rating
To involve employees in the financial decision-making process
To help employees decide whether to buy company securities
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Why are financial statements of different companies not always comparable?
They lack auditors' opinions.
They use different accounting practices.
They have not been verified.
They do not cover non-financial issues.
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