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Exam 14: Financial Statements Structure and Interpretation

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Question 71

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Financial Capacity is a general term which relates to an organization's cash reserves and borrowing power

A) True
B) False

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Question 72

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Efficiency refers to the ability of the company,on the basis of the cash it has on hand and the cash it is generating within its operations,to meet its ongoing financial obligations.

A) True
B) False

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Question 73

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The financial document that has been likened to a snapshot of how the company's finances are doing at that moment is called an income statement.

Success of the organization's human resources initiatives is tracked by managers' analysis of financial statements.

A management team tracks the effectiveness of its decisions and product/service offerings with respect to growth,profitability,and asset productivity by watching its stock price.

An income statement shows revenues,expenses,and net income over a period of time.

_____ refers to how effective the organization is in deploying its resources and managing its operational processes in the delivery of goods and/or services to the marketplace.

Past cash disbursements are considered in an organization's solvency analysis.

One of the fundamental types of business transactions that managers are constantly making decisions about and reviewing is current asset transactions.

Liquidity refers to a longer-term assessment of the financial stability of the organization.

That it sets specific operational parameters for the various divisions and departments within the organization is a reason for the importance of forecasting and budgeting.

Although Capital Asset Transaction do not directly related to the current year's profit of the organization,they do impact on the liquidity of the organization over the period of time.

An income statement shows how much income each employee earned.

What do operational transactions represent?

generate the dollars needed to sustain their charitable and community-based mission.

Current assets refers to a longer-term assessment of the financial stability of the organization.

The financial statement that explains how a firm's cash changed from the beginning of the accounting period to the end is called the balance sheet.

That it requires the organization to think about what is happening in the markets is a reason for the importance of forecasting and budgeting.

Operational transactions represent the flow of money within the organization which is directly related to ______ business dealings.

Financial statements provide vital information,to managers,regarding an organization's current assets and solvency position.