CFI FMVA Exam Quizzes with Correct
Answers
Cash accounting method - ✔✔record income and expenditures at the time the
money changes hands
Cash accounting method - ✔✔An accounting method in which income and
expenditures are recorded at the time the money changes hands.
Accrual Accounting - ✔✔recording in each fiscal period applicable expenses, whether
paid or not, and income earned, whether collected or not.
Accrual Basis Accounting - ✔✔reporting income when it is earned and expenses
when they are incurred
Accrual Basis Accounting - ✔✔the method of accounting that recognizes revenue
when it is earned and matches expenses to the revenues they helped produce
Accrual Basis Accounting - ✔✔Accounting basis in which companies record, in the
periods in which the events occur, transactions that change a company's financial
statements, even if cash was not exchanged.
accrued expenses - ✔✔expenses incurred in one fiscal period but not paid until a
later fiscal period
accrued expenses - ✔✔expenses incurred but not yet paid in cash or recorded
,Cash flow from operating activities - ✔✔The net amount of cash provided from
operating activities.
cash flow from financing activities - ✔✔The section of the statement of cash flows
that reports cash flows from transactions affecting the equity and debt of the business.
cash flow from financing activities - ✔✔items related to debt, dividends, and issuing
or repurchasing shares
cash flow from investing activities - ✔✔The section of the statement of cash flows
that reports cash flows from transactions affecting investments in noncurrent assets.
cash flow from investing activities - ✔✔involves any cash in or out of the company
due to investment in or disposal of fixed assets.
Contributed surplus - ✔✔Amount paid for shares in excess of their par value
Contributed surplus - ✔✔money that has been invested in the firm by outside parties
Contributed surplus - ✔✔A source of contributed capital that can result from certain
types of equity transactions, including the reacquisition of shares.
Straightline depreciation - ✔✔Allocates equal amounts of plant assets net cost to
depreciation during its useful life.
Accounts Receivable - ✔✔Amounts to be received in the future due to the sale of
goods or services
,Accounts Payable - ✔✔Amounts to be paid in the future for goods or services already
acquired
Cash Flow Accounting System - ✔✔An accounting system entering expenses and
revenues only when cash is received or paid out.
authorised share capital - ✔✔Maximum number of shares that a company can issue,
as specified in the firm's memorandum of association
outstanding share capital - ✔✔Issued share capital less the par value of shares that
are held in the company's treasury.
inventory - ✔✔the quantity of goods that a firm has on hand
inventory - ✔✔a complete list of items such as property, goods in stock, or the
contents of a building.
Working Capital - ✔✔current assets - current liabilities
Net Working Capital - ✔✔current assets minus current liabilities
current assets - ✔✔cash and other assets expected to be exchanged for cash or
consumed within a year
Current Liabilities - ✔✔liabilities due within a short time, usually within a year
, Current assets include - ✔✔cash, marketable securities, accounts receivable, and
inventories
Current liabilities include - ✔✔notes payable, accounts payable, unearned revenues,
and accrued liabilities such as taxes, salaries and wages, and interest.
Current liabilities include - ✔✔Accounts Payable
Short-Term Notes Payable
Wages Payable
Taxes Payable
Interest Payable
Contingencies - ✔✔possible outcomes; different plans based on varying
circumstances
Unearned Revenue - ✔✔A liability created when a business collects cash from
customers in advance of providing services or delivering goods.
Common Shares - ✔✔Represent an ownership interest, a residual claim on the firm's
assets in liquidation, and govern through voting rights;
No obligation for firm to pay a dividend;
Can proxy their votes to others;
Preferred Shares - ✔✔Shares of stock that entitle owner to a fixed dividend amount.
Dividend must be paid by the company before common stock owners get paid.
Shareholders usually do not have voting rights.
Answers
Cash accounting method - ✔✔record income and expenditures at the time the
money changes hands
Cash accounting method - ✔✔An accounting method in which income and
expenditures are recorded at the time the money changes hands.
Accrual Accounting - ✔✔recording in each fiscal period applicable expenses, whether
paid or not, and income earned, whether collected or not.
Accrual Basis Accounting - ✔✔reporting income when it is earned and expenses
when they are incurred
Accrual Basis Accounting - ✔✔the method of accounting that recognizes revenue
when it is earned and matches expenses to the revenues they helped produce
Accrual Basis Accounting - ✔✔Accounting basis in which companies record, in the
periods in which the events occur, transactions that change a company's financial
statements, even if cash was not exchanged.
accrued expenses - ✔✔expenses incurred in one fiscal period but not paid until a
later fiscal period
accrued expenses - ✔✔expenses incurred but not yet paid in cash or recorded
,Cash flow from operating activities - ✔✔The net amount of cash provided from
operating activities.
cash flow from financing activities - ✔✔The section of the statement of cash flows
that reports cash flows from transactions affecting the equity and debt of the business.
cash flow from financing activities - ✔✔items related to debt, dividends, and issuing
or repurchasing shares
cash flow from investing activities - ✔✔The section of the statement of cash flows
that reports cash flows from transactions affecting investments in noncurrent assets.
cash flow from investing activities - ✔✔involves any cash in or out of the company
due to investment in or disposal of fixed assets.
Contributed surplus - ✔✔Amount paid for shares in excess of their par value
Contributed surplus - ✔✔money that has been invested in the firm by outside parties
Contributed surplus - ✔✔A source of contributed capital that can result from certain
types of equity transactions, including the reacquisition of shares.
Straightline depreciation - ✔✔Allocates equal amounts of plant assets net cost to
depreciation during its useful life.
Accounts Receivable - ✔✔Amounts to be received in the future due to the sale of
goods or services
,Accounts Payable - ✔✔Amounts to be paid in the future for goods or services already
acquired
Cash Flow Accounting System - ✔✔An accounting system entering expenses and
revenues only when cash is received or paid out.
authorised share capital - ✔✔Maximum number of shares that a company can issue,
as specified in the firm's memorandum of association
outstanding share capital - ✔✔Issued share capital less the par value of shares that
are held in the company's treasury.
inventory - ✔✔the quantity of goods that a firm has on hand
inventory - ✔✔a complete list of items such as property, goods in stock, or the
contents of a building.
Working Capital - ✔✔current assets - current liabilities
Net Working Capital - ✔✔current assets minus current liabilities
current assets - ✔✔cash and other assets expected to be exchanged for cash or
consumed within a year
Current Liabilities - ✔✔liabilities due within a short time, usually within a year
, Current assets include - ✔✔cash, marketable securities, accounts receivable, and
inventories
Current liabilities include - ✔✔notes payable, accounts payable, unearned revenues,
and accrued liabilities such as taxes, salaries and wages, and interest.
Current liabilities include - ✔✔Accounts Payable
Short-Term Notes Payable
Wages Payable
Taxes Payable
Interest Payable
Contingencies - ✔✔possible outcomes; different plans based on varying
circumstances
Unearned Revenue - ✔✔A liability created when a business collects cash from
customers in advance of providing services or delivering goods.
Common Shares - ✔✔Represent an ownership interest, a residual claim on the firm's
assets in liquidation, and govern through voting rights;
No obligation for firm to pay a dividend;
Can proxy their votes to others;
Preferred Shares - ✔✔Shares of stock that entitle owner to a fixed dividend amount.
Dividend must be paid by the company before common stock owners get paid.
Shareholders usually do not have voting rights.
