ETS MFT MBA FINAL PAPER 2026 QUESTIONS
WITH SOLUTIONS GRADED A+
◉ Income Statement. Answer: AKA profit and loss statement; primarily
focuses on the company's revenues and expenses during a particular
period;
Net Income = (Total Revenue + Gains) - (Total Expenses + Losses)
◉ Statement of Retained Earnings. Answer: AKA Statement of Equity;
outlines the changes in retained earnings for a company over a specified
period;
◉ Retained Earnings. Answer: profits held by a company in reserve in
order to invest in future projects rather than distribute as dividends to
shareholders
◉ Statement of Cash Flows. Answer: summarizes the amount of cash
and cash equivalents entering and leaving a company; includes
operating, investing, and financing activities
◉ cash flow. Answer: $$$ that goes in/out of a business
◉ profit. Answer: $$$ leftover after Revenues - Expenses
,◉ cash from operating activities. Answer: receipts from sales of
goods/services, interest payments, income tax payments, salaries/wages,
rent
ALSO depreciation, inventory, accts receivable, payable
◉ cash from investing activities. Answer: changes in equipment, assets,
or investments
◉ cash from financing activities. Answer: cash from investors/banks,
dividends, repayment of debt,
◉ Direct Cash Flow Method. Answer: determines changes in cash
receipts and payments, which are reported in the cash flow from the
operations section.
◉ Indirect Cash Flow Method. Answer: takes the net income generated
in a period and adds or subtracts changes in the asset and liability
accounts to determine the implied cash flow
◉ liquidity. Answer: the ease with which an asset, or security, can be
converted into ready cash without affecting its market price; cash is the
most liquid of assets
, ◉ Accrual Basis Accounting. Answer: revenue or expenses are recorded
when a transaction occurs; follows the matching principle, which says
that revenues and expenses should be recognized in the same period
◉ Cash Accounting. Answer: recognizes transactions only when
payment is exchanged.
◉ capital stock. Answer: amount of common and preferred shares that a
company is authorized to issue, recorded on the balance sheet under
shareholders' equity;
amount of capital stock is the maximum amount of shares that a
company can ever have outstanding
◉ asset. Answer: resource with economic value that an individual,
corporation or country owns or controls with the expectation that it will
provide future benefit.
◉ current assets. Answer: all the assets of a company that are expected
to be sold/used as a result of standard biz ops over the next year;
includes cash/cash equivalents, accts receivable, inventory, prepaid
expenses, marketable securities
◉ non current assets. Answer: long-term investments not easily
converted to cash or are not expected to become cash within the year;
includes investments, intellectual property, real estate, and equipment
WITH SOLUTIONS GRADED A+
◉ Income Statement. Answer: AKA profit and loss statement; primarily
focuses on the company's revenues and expenses during a particular
period;
Net Income = (Total Revenue + Gains) - (Total Expenses + Losses)
◉ Statement of Retained Earnings. Answer: AKA Statement of Equity;
outlines the changes in retained earnings for a company over a specified
period;
◉ Retained Earnings. Answer: profits held by a company in reserve in
order to invest in future projects rather than distribute as dividends to
shareholders
◉ Statement of Cash Flows. Answer: summarizes the amount of cash
and cash equivalents entering and leaving a company; includes
operating, investing, and financing activities
◉ cash flow. Answer: $$$ that goes in/out of a business
◉ profit. Answer: $$$ leftover after Revenues - Expenses
,◉ cash from operating activities. Answer: receipts from sales of
goods/services, interest payments, income tax payments, salaries/wages,
rent
ALSO depreciation, inventory, accts receivable, payable
◉ cash from investing activities. Answer: changes in equipment, assets,
or investments
◉ cash from financing activities. Answer: cash from investors/banks,
dividends, repayment of debt,
◉ Direct Cash Flow Method. Answer: determines changes in cash
receipts and payments, which are reported in the cash flow from the
operations section.
◉ Indirect Cash Flow Method. Answer: takes the net income generated
in a period and adds or subtracts changes in the asset and liability
accounts to determine the implied cash flow
◉ liquidity. Answer: the ease with which an asset, or security, can be
converted into ready cash without affecting its market price; cash is the
most liquid of assets
, ◉ Accrual Basis Accounting. Answer: revenue or expenses are recorded
when a transaction occurs; follows the matching principle, which says
that revenues and expenses should be recognized in the same period
◉ Cash Accounting. Answer: recognizes transactions only when
payment is exchanged.
◉ capital stock. Answer: amount of common and preferred shares that a
company is authorized to issue, recorded on the balance sheet under
shareholders' equity;
amount of capital stock is the maximum amount of shares that a
company can ever have outstanding
◉ asset. Answer: resource with economic value that an individual,
corporation or country owns or controls with the expectation that it will
provide future benefit.
◉ current assets. Answer: all the assets of a company that are expected
to be sold/used as a result of standard biz ops over the next year;
includes cash/cash equivalents, accts receivable, inventory, prepaid
expenses, marketable securities
◉ non current assets. Answer: long-term investments not easily
converted to cash or are not expected to become cash within the year;
includes investments, intellectual property, real estate, and equipment
