Financial Assessment Quiz: CSM Summit

Reviewed by Editorial Team
The ProProfs editorial team is comprised of experienced subject matter experts. They've collectively created over 10,000 quizzes and lessons, serving over 100 million users. Our team includes in-house content moderators and subject matter experts, as well as a global network of rigorously trained contributors. All adhere to our comprehensive editorial guidelines, ensuring the delivery of high-quality content.
Learn about Our Editorial Process
| By Mgett
M
Mgett
Community Contributor
Quizzes Created: 1 | Total Attempts: 109
| Attempts: 109
Quiz Flashcard
SettingsSettings
Please wait...
  • 1/15 Questions

    When might it be useful to look at non-GAAP financial reporting?

    • When you want to find a really good bottle of wine
    • When a company has an unusual, one-time expense and you want to understand the overall health of the company over time
    • Before an audit
    • It’s not useful. It’s mainly a way for companies to make their financial results look better than they are
Please wait...
About This Quiz

This Financial Assessment Quiz for the CSM Summit explores key concepts in finance and accounting, such as pro-forma results, non-GAAP reporting, and Cost of Goods Sold (COGS). It is designed to assess understanding of financial performance using real-world scenarios, enhancing skills relevant to financial professionals.

Financial Assessment Quiz: CSM Summit - Quiz

Quiz Preview

  • 2. 

    What does the income statement show? (chapter 1)

    • How much cash was used for the stock repurchase program.

    • The ROI on Mike Hack's robot suits.

    • Revenues, expenses, and profits for a period of time.

    • Revenues, expenses, and profits since the company was founded.

    Correct Answer
    A. Revenues, expenses, and profits for a period of time.
    Explanation
    The income statement shows the financial performance of a company over a specific period of time. It includes revenues, which are the income generated from sales of goods or services, expenses, which are the costs incurred in generating revenue, and profits, which is the difference between revenues and expenses. It provides a snapshot of the company's financial health and helps in assessing its profitability and efficiency.

    Rate this question:

  • 3. 

    What is an example of a capital expense? (chapter 1)

    • Bob's donuts

    • Monthly rent for an offshore data center

    • Large purchase of equipment for an offshore data center

    • Salaries for c-level executives

    Correct Answer
    A. Large purchase of equipment for an offshore data center
    Explanation
    A capital expense refers to a significant investment made by a company for acquiring or improving its long-term assets, such as property, equipment, or infrastructure. In this case, the large purchase of equipment for an offshore data center qualifies as a capital expense because it involves a substantial expenditure to acquire assets that will be used by the company for an extended period. This expense is considered a long-term investment that will contribute to the company's operations and generate future benefits.

    Rate this question:

  • 4. 

    What are the two ways in which InsideView positively affects a customer's income statement?

    • Increased sales and decreased gross margin

    • Decreased selling expenses and decreased gross margin

    • Increased sales revenue and decreased selling expenses

    • Increased length of happy hour and decreased wine consumption

    Correct Answer
    A. Increased sales revenue and decreased selling expenses
    Explanation
    InsideView positively affects a customer's income statement by increasing sales revenue and decreasing selling expenses. By providing valuable insights and data about potential customers, InsideView helps businesses identify new sales opportunities and close deals more effectively, resulting in increased sales revenue. Additionally, InsideView helps businesses streamline their sales processes and reduce the costs associated with selling, such as marketing expenses and sales team salaries, leading to decreased selling expenses.

    Rate this question:

  • 5. 

    Which is NOT found on the income statement?

    • Revenues

    • Net profit

    • Sales, administrative, and general expenses

    • Capital expenditures

    Correct Answer
    A. Capital expenditures
    Explanation
    The income statement is a financial statement that shows a company's revenues, expenses, and net profit or loss over a specific period. It focuses on the company's operating activities and does not include capital expenditures, which are investments made in long-term assets such as property, plant, and equipment. Capital expenditures are typically recorded in the balance sheet and not on the income statement.

    Rate this question:

  • 6. 

    Which question would you ask to determine whether an expense is a Cost of Sale or Operating Expense? 

    • Is the expense spread out over time?

    • Is this expense silly?

    • Does the expense directly relate to manufacturing or selling the product or service?

    • Does the expense belong on the Cash Flow Statement

    Correct Answer
    A. Does the expense directly relate to manufacturing or selling the product or service?
    Explanation
    The question that would determine whether an expense is a Cost of Sale or Operating Expense is "Does the expense directly relate to manufacturing or selling the product or service?" This question is relevant because expenses that directly contribute to the production or sale of goods or services are considered Costs of Sale, while expenses that support the overall operation of the business are classified as Operating Expenses.

    Rate this question:

  • 7. 

    What are "pro-forma" results?

    • Consolidated financial results for all units of a business

    • An estimate of financial results for a future time period

    • The latest diet fad

    • Another term for non-GAAP results

    Correct Answer
    A. An estimate of financial results for a future time period
    Explanation
    "Pro-forma" results refer to the estimated financial results for a future time period. These results are not based on actual data but are projected figures that provide an indication of how a company expects to perform in the future. Pro-forma results are often used by businesses for planning purposes, such as budgeting or forecasting, and can help stakeholders make informed decisions. Unlike consolidated financial results, pro-forma results are not based on the actual performance of all units of a business. Additionally, they are distinct from non-GAAP results, which refer to financial measures that do not comply with generally accepted accounting principles.

    Rate this question:

  • 8. 

    When is revenue recognized?

    • When the accounting books are “closed” for the time period

    • Each and every Friday!

    • When the invoice is paid

    • When the related product or service is delivered to the customer

    Correct Answer
    A. When the related product or service is delivered to the customer
    Explanation
    Revenue is recognized when the related product or service is delivered to the customer. This is because revenue is earned when the company has fulfilled its obligation to provide goods or services to the customer. The payment of the invoice or the closing of accounting books for the time period are not the determining factors for recognizing revenue.

    Rate this question:

  • 9. 

    Which best describes the "art" of finance and accounting? (chapter 1)

    • Using limited data to come as close as possible to an accurate description of how well a company is performing

    • Using limited data to provide the best looking snapshot of how a company is performing

    • Exposing every detail of how a company runs its business

    • Putting lipstick on a pig

    Correct Answer
    A. Using limited data to come as close as possible to an accurate description of how well a company is performing
    Explanation
    The "art" of finance and accounting involves using limited data to come as close as possible to an accurate description of how well a company is performing. This means that finance and accounting professionals analyze financial information and make informed judgments based on the available data to determine the company's performance. It emphasizes the skill and expertise required to interpret financial data and provide an accurate assessment of the company's financial health.

    Rate this question:

  • 10. 

    Which is the most direct measure of how efficiently a management team is running a company?

    • Gross margin

    • Operating margin

    • Net margin

    • Margarine

    Correct Answer
    A. Operating margin
    Explanation
    Operating margin is the most direct measure of how efficiently a management team is running a company. It represents the percentage of profit a company generates from its operations, indicating how well it controls costs and manages its expenses. A higher operating margin suggests that the management team is effectively utilizing its resources and generating more profit from its core business activities. Therefore, operating margin is a key indicator of management efficiency and overall company performance.

    Rate this question:

  • 11. 

    Using the information found below, calculate the gross profit margin: - Revenue = $100 - Cost of Goods Sold (COGS) = $20 - Taxes = $5

    • 80%

    • 20%

    • 75%

    • 85%

    Correct Answer
    A. 80%
    Explanation
    The gross profit margin is calculated by subtracting the cost of goods sold from the revenue, and then dividing the result by the revenue. In this case, the revenue is $100 and the cost of goods sold is $20, so the gross profit is $80. Dividing $80 by $100 and multiplying by 100 gives a gross profit margin of 80%.

    Rate this question:

  • 12. 

    What does "above the line" mean? (chapter 8)

    • Anything above net profit on an income statement

    • Anything above EBIT on an income statement

    • The title of the new Leonardo DiCaprio movie

    • Anything above gross profit on an income statement

    Correct Answer
    A. Anything above gross profit on an income statement
    Explanation
    "Above the line" refers to the items that are listed above the gross profit on an income statement. These items include revenue, cost of goods sold, and gross profit. Anything above gross profit is considered "above the line" and is typically related to operating expenses, such as selling, general, and administrative expenses, as well as depreciation and amortization. This term is commonly used in accounting to distinguish between different sections of the income statement.

    Rate this question:

  • 13. 

    When is revenue booked?

    • When Umberto says so.

    • When a customer signs an order form (contract)

    • When product or services are delivered to the customer

    • At the point of invoice.

    Correct Answer
    A. When a customer signs an order form (contract)
    Explanation
    Revenue is booked when a customer signs an order form (contract). This is because signing an order form indicates a commitment from the customer to purchase a product or service. It establishes a legally binding agreement between the company and the customer, and therefore, revenue can be recognized at this point. The signing of the contract signifies that the company has fulfilled its obligation to provide the product or service, even if the actual delivery or invoicing has not yet occurred.

    Rate this question:

  • 14. 

    What is an example of Cost of Goods Sold (COGS)? (chapter 1)

    • Cost to host our software with Amazon Web Services (AWS)

    • Rob Asscherick's new carbon fiber bike wheels

    • CSM salaries

    • Sales commissions

    Correct Answer
    A. Cost to host our software with Amazon Web Services (AWS)
    Explanation
    The cost to host our software with Amazon Web Services (AWS) is an example of Cost of Goods Sold (COGS) because it directly relates to the production or delivery of the software. COGS includes the expenses directly associated with producing or purchasing the goods that a company sells, and in this case, hosting the software on AWS is a necessary expense for delivering the product to customers.

    Rate this question:

  • 15. 

    Using the information found below, calculate the net profit margin: - Sales = $200 - Cost of Sales = $125 - Taxes = $5 - Operating Expenses = $50

    • 10%

    • 20%

    • $20

    • $275

    Correct Answer
    A. 10%
    Explanation
    The net profit margin is calculated by subtracting the cost of sales, taxes, and operating expenses from the sales, and then dividing the result by the sales. In this case, the calculation would be: ($200 - $125 - $5 - $50) / $200 = $20 / $200 = 0.10 or 10%.

    Rate this question:

Quiz Review Timeline (Updated): Mar 13, 2024 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 13, 2024
    Quiz Edited by
    ProProfs Editorial Team
  • Aug 03, 2014
    Quiz Created by
    Mgett
Back to Top Back to top
Advertisement
×

Wait!
Here's an interesting quiz for you.

We have other quizzes matching your interest.