Module 10
Post test
Choose the best answer.
1. The main financial statements needed are the _____, the income statement and the cash flow statement.
1. check book                                                      3. cash receipt
2. balance sheet                                                  4. invoice
2. _________________ are a vital and integral part of a report: do NOT fail to read them.
1. Dictionaries                                                    3. Receipts
2. Footnotes                                                         4. Salaries
3. Owners' ____________________ is the net worth of the company.
1. equity                                                               3. liability
2. asset                                                                  4. competition
4. _________________ are the financial obligations a company owes to other entities.
1. Assets                                                               3. Liabilities
2. Expenses                                                          4. Invoices
5. If a company lacks enough cash to pay its bills, it _____________________________________.
1. gets the money in the middle of May     3. can be paid either physically or electronically
2. must exceed its periodic cash outflows   4. can be forced into bankruptcy and liquidation
6. The cash flow statement shows that a company _____________________________________.
1. has cash or it does not                                 3. risks manipulation through creative accounting
2. can be forced into liquidation                   4. fails to generate cash
7. When reading footnotes it is important to ___________________________________.
1. determine when revenue was earned                       3. disclose additional information
2. analyze the company's accounting methods          4. include statements correcting errors
8. There are ______________________ for ensuring footnotes are clear and readable.
1. legal and technical jargon                           3. no standards
2. short shrifts to major issues                       4. things concealed from investors
9. The prospectus is a ___________________ and so must meet legal transparency standards.
1. detailed document                                         3. legal and technical jargon
2. valuable market share                                  4. legal declaration
10. Because the information in a prospectus is just projections the actual outcomes are _____________.
1. uncertain                                                          3. certain
2. unbelievable                                                   4. suspicious

Click Answer Key
1. 2, 2. 2, 3. 1, 4. 3, 5. 4, 6. 1, 7. 2, 8. 3, 9. 4, 10. 1