Question

Income statement reflect the accounting results of a firm's activity over a period of time (typically a quarter or fiscal year) and include which of the following:

	Revenue (or sales)
	Gross profit
	Selling, General & Administrative expense (SG&A)
	All of the above

Gross profit is the initial amount of profit generated after deducting:

	Raw materials and direct labor
	Raw materials and total labor
	Raw materials, direct labor and executive compensation
	Raw materials, indirect labor and executive compensation

Which of the following is an important qualitative consideration when evaluating the earnings record of a company or business?

	Quantitative analysis alone is not sufficient.
	Nature of the business including factors that drive demand, competition, and input costs.
	Current year earnings should not be the primary basis for evaluation.
	All of the options provided.

BEFC reported cost of goods sold (COGS) of $1.8 million and average inventory for the year of $300,000. What was the Day's Sales in Inventory (DSOs) for the year?

	60.0 days
	60.8 days
	64.3 days
	68.8 days

A statement of cash flow will include all except:

	Operating activities
	Investing activities
	Financing activities
	Foreign trading activities

Operating activities is defined as:

	The principal revenue-generating activities of an organization and other activities that are not investing or financing; any cash flows from current assets and current liabilities
	Cash flows from the acquisition and disposal of long-term assets and other investments not included in cash equivalents
	Cash flows that result in changes in the size and composition of the contributed equity and borrowings of the entity (i.e. bonds, stock, cash dividends)
	All of the above.

Answer 1

Income statement reflect the accounting results of a firm's activity over a period of time (typically a quarter or fiscal year) and include which of the following:

All of the above

Income Statement calculates net income after deducting all expenses from sales.

Gross profit is the initial amount of profit generated after deducting:

Raw materials and direct labor

Rest all expenses are deducted to reach net profit

Which of the following is an important qualitative consideration when evaluating the earnings record of a company or business?

All of the options provided.

BEFC reported cost of goods sold (COGS) of $1.8 million and average inventory for the year of $300,000. What was the Day's Sales in Inventory (DSOs) for the year?

Days Sales = 365/ Inventory Turnover ratio

Inventory Turnover ratio= COGS/Average Inventory

=1.8 million/300,000

=6

Hence, Days Sales = 365/6 = 60.8 days

A statement of cash flow will include all except:

Foreign trading activities

Cash Flow Statement has 3 parts- Operating, Investing and Financing

Operating activities is defined as:

The principal revenue-generating activities of an organization and other activities that are not investing or financing; any cash flows from current assets and current liabilities