Financial Statements Quiz
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Questions and Answers

Which of the following is a reason why financial statements are read by comparing the results to competitors or other industry participants?

  • To determine a company's health
  • To understand changes over time
  • To compare income statements
  • To identify the best performing companies (correct)
  • What type of financial statement reports a company's income for a specific period of time?

  • Comparative income statement (correct)
  • Statement of retained earnings
  • Cash flow statement
  • Balance sheet
  • How can financial statements be read to better understand changes over time?

  • By comparing the results to competitors
  • By comparing the results to prior periods (correct)
  • By comparing the balance sheets
  • By comparing the income statements
  • How can financial statements be read to determine a company's health?

    <p>By comparing the income statements</p> Signup and view all the answers

    Which financial statement can be used to compare a company's income from one year to another?

    <p>Income statement</p> Signup and view all the answers

    What is one way financial statements can be read to better understand changes over time?

    <p>By comparing the income statements</p> Signup and view all the answers

    What is one way financial statements can be read to compare a company's performance to its competitors?

    <p>Comparing financial ratios</p> Signup and view all the answers

    Which of the following is NOT a way to read financial statements?

    <p>Assessing customer satisfaction</p> Signup and view all the answers

    Why is it important to compare financial statements to prior periods?

    <p>To understand changes over time</p> Signup and view all the answers

    Which of the following is NOT a type of financial statement?

    <p>Profit and loss statement</p> Signup and view all the answers

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