Adventis Financial Modeling Certification (FMC)
Level 1 & 2 Exams (Latest 2023/ 2024 Updates
STUDY BUNDLE WITH COMPLETE SOLUTIONS)
Questions and Verified Answers| 100% Correct|
Grade A
financial statement communicates what? - ANSWER- financial condition
- results of operations
- various other activities of an organization
how board of directors use financial data... - ANSWER- hold management
accountable
- make board-level decisions about corporate strategy
how company management uses financial data... - ANSWER- measure performance
- make strategic, operating and financial decisions
how creditors use financial data... - ANSWER- measure creditworthiness
- liquidity
- bankruptcy risk
how investors use financial data... - ANSWERmake decisions on buying/selling equity
investments
how acquirers use financial data... - ANSWER- determine valuation
- make investment decisions
how regulators use financial data... - ANSWERdetermine whether company is
operating according to regulations/law
what does the income statement present? - ANSWERresults of operations over a
period of time
what is the purpose of the income statement? - ANSWERto show whether the
company made or lost money during the period reported
what does the income statement indicate? - ANSWERhow revenues are translated
into net income through subtracting expenses
revenue (sales) - ANSWERamount charged for the delivery of goods or services
cost of sales (cogs) - ANSWER- direct cost of producing revenue
- Ex: raw materials, direct wages, etc.
, gross profit - ANSWER- revenue - cogs
- indicates how efficiently labor and materials are used in the production process
operating expenses - ANSWER- all other expenses required to run a business
- Ex: management salaries, marketing, travel, etc.
operating income (EBIT) - ANSWER- revenue - cogs - operating expenses
- indicates a company's earning power from ongoing operations
non-operating expenses - ANSWER- expenses not related to regular business of the
company
- Ex: interest expense, restructuring expense, etc.
corporate taxes - ANSWERlocal and federal income taxes the company incurs
net income (net earnings) - ANSWER- revenue - cogs - operating expenses - non-
operating expenses - taxes
- indicates increase in shareholders' value resulting from operations
what does the balance sheet show? - ANSWERan organization's financial position at
a particular point in time
what does the balance sheet disclose? - ANSWER- the resources an organization
controls (assets)
- the claims on those resources (liabilities and equity)
what is the basic accounting equation? - ANSWERassets = liabilities + equity
what is the basic accounting equation a foundation for? - ANSWERthe double entry
bookkeeping system
what is the double entry bookkeeping system? - ANSWERthere is a credit for every
debit
what does the accrual accounting method measure? - ANSWERthe performance of a
company regardless of when cash transaction occur
cash - ANSWERcurrent assets comprising currency or currency equivalents that can
be accessed immediately
accounts receivable - ANSWERamount owed to an organization from the sale of a
good or service
fixed assets - ANSWER- value of assets and property that can't be easily converted to
cash
- has a useful life of greater than 1 year
- Ex: PPE
Level 1 & 2 Exams (Latest 2023/ 2024 Updates
STUDY BUNDLE WITH COMPLETE SOLUTIONS)
Questions and Verified Answers| 100% Correct|
Grade A
financial statement communicates what? - ANSWER- financial condition
- results of operations
- various other activities of an organization
how board of directors use financial data... - ANSWER- hold management
accountable
- make board-level decisions about corporate strategy
how company management uses financial data... - ANSWER- measure performance
- make strategic, operating and financial decisions
how creditors use financial data... - ANSWER- measure creditworthiness
- liquidity
- bankruptcy risk
how investors use financial data... - ANSWERmake decisions on buying/selling equity
investments
how acquirers use financial data... - ANSWER- determine valuation
- make investment decisions
how regulators use financial data... - ANSWERdetermine whether company is
operating according to regulations/law
what does the income statement present? - ANSWERresults of operations over a
period of time
what is the purpose of the income statement? - ANSWERto show whether the
company made or lost money during the period reported
what does the income statement indicate? - ANSWERhow revenues are translated
into net income through subtracting expenses
revenue (sales) - ANSWERamount charged for the delivery of goods or services
cost of sales (cogs) - ANSWER- direct cost of producing revenue
- Ex: raw materials, direct wages, etc.
, gross profit - ANSWER- revenue - cogs
- indicates how efficiently labor and materials are used in the production process
operating expenses - ANSWER- all other expenses required to run a business
- Ex: management salaries, marketing, travel, etc.
operating income (EBIT) - ANSWER- revenue - cogs - operating expenses
- indicates a company's earning power from ongoing operations
non-operating expenses - ANSWER- expenses not related to regular business of the
company
- Ex: interest expense, restructuring expense, etc.
corporate taxes - ANSWERlocal and federal income taxes the company incurs
net income (net earnings) - ANSWER- revenue - cogs - operating expenses - non-
operating expenses - taxes
- indicates increase in shareholders' value resulting from operations
what does the balance sheet show? - ANSWERan organization's financial position at
a particular point in time
what does the balance sheet disclose? - ANSWER- the resources an organization
controls (assets)
- the claims on those resources (liabilities and equity)
what is the basic accounting equation? - ANSWERassets = liabilities + equity
what is the basic accounting equation a foundation for? - ANSWERthe double entry
bookkeeping system
what is the double entry bookkeeping system? - ANSWERthere is a credit for every
debit
what does the accrual accounting method measure? - ANSWERthe performance of a
company regardless of when cash transaction occur
cash - ANSWERcurrent assets comprising currency or currency equivalents that can
be accessed immediately
accounts receivable - ANSWERamount owed to an organization from the sale of a
good or service
fixed assets - ANSWER- value of assets and property that can't be easily converted to
cash
- has a useful life of greater than 1 year
- Ex: PPE
