Financial Literacy for Non-Financial Managers - Beginner Level

Question 1
Which of the following best describes the primary purpose of a balance sheet?

(A) It shows profitability over a period, similar to income statements but with more details.

(B) It presents a snapshot of a company’s assets, liabilities, and equity at a specific point in time.

(C) It forecasts future cash inflows and outflows.

(D) It lists all revenue and expenses during a fiscal period.

Question 2
What is one of the main benefits of preparing a budget for a business?

(A) It helps in planning and controlling operational performance.

(B) It ensures that all financial statements are error-free.

(C) It solely determines the profitability of the company.

(D) It serves as a comprehensive report of past financial transactions.

Question 3
When reading an income statement, which of the following is the manager most interested in understanding?

(A) The schedules for future payments and receipts.

(B) The overall financial position at a particular instant in time.

(C) The detailed breakdown of company assets and liabilities.

(D) The revenues and expenses to evaluate the company’s profitability over a period.

Question 4
Which statement best explains the term 'cash flow' in a business context?

(A) It represents the total value of a company’s assets.

(B) It only refers to the incoming cash from sales.

(C) It is the movement of cash in and out of a business over a period of time.

(D) It is the measure of how much profit the business earned.

Question 5
In the context of financial statements, what would a non‐financial manager likely use to assess the overall health of the company?

(A) Only using the cash flow statement since it tracks all money movements.

(B) Focusing exclusively on the income statement because it indicates profit.

(C) Relying solely on the balance sheet as it shows all company details.

(D) A combination of balance sheets, income statements, and cash flow statements to get a full picture.

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