Skip to ContentGo to accessibility page
OpenStax Logo
Principles of Finance 2e

Multiple Choice

Principles of Finance 2eMultiple Choice

Multiple Choice

1 .
Which of the following is a measure of the performance of a firm’s daily operations?
  1. gross profit
  2. cost of goods sold
  3. operating income
  4. net income
2 .
In which section of the classified balance sheet would you find a note payable due in six months?
  1. current assets
  2. current liabilities
  3. noncurrent liabilities
  4. common stock
3 .
Which financial statement must be prepared first?
  1. statement of retained earnings
  2. balance sheet
  3. statement of cash flows
  4. income statement
4 .
Which of the following represents earned capital on the statement of owner’s equity?
  1. retained earnings
  2. common stock
  3. preferred stock
  4. additional paid-in capital
5 .
Which section of the statement of cash flows reflects the cash generated from or used by a company’s day-to-day operations?
  1. investing activities
  2. financing activities
  3. operating activities
  4. noncash activities
6 .
How do you calculate free cash flow (FCF)?
  1. net income less dividends
  2. operating cash flow less capital expenditures
  3. gross profit less depreciation
  4. net income plus interest
7 .
How do you calculate common-size analysis on the income statement?
  1. income statement line item/gross profit
  2. income statement line item/net income
  3. net sales/income statement line item
  4. income statement line item/net sales
8 .
Which of the following does not represent a filing commonly required by the SEC?
  1. annual report, 10-K
  2. quarterly report, 10-Q
  3. Form 8-K
  4. 1040
PreviousNext
Citation/Attribution
Reuse and redistribution of this content in digital or print format:
  • This book may not be used in the training of large language models or otherwise be ingested into large language models or generative AI offerings without OpenStax's prior written permission.
  • This book uses the Creative Commons Attribution-NonCommercial-ShareAlike License, which means that you can reuse and modify the material only for noncommercial purposes, must attribute OpenStax, and must distribute any derivative works under the same license.
  • Any commercial printing of this textbook, including using a local or custom printer, must be approved by OpenStax, and proper citation provided.
  • OpenStax-copyrighted images, activities, assessments, and similar components of this book are subject to the same licensing – CC-BY-NC-SA. They can be used for noncommercial purposes with attribution. Commercial use requires permission.
  • Permission requests: Anyone who intends to incorporate this content (including text, images, and other components) into large language models, use it in AI offerings, use it commercially (including in print), and/or has questions about another use case is welcome to complete our reuse request form.
Attribution information
  • If you are redistributing all or part of this book in a noncommercial print format, then you must include on every physical page the following attribution:

    Access for free at https://openstax.org/books/principles-finance-2e/pages/1-why-it-matters

  • If you are redistributing all or part of this book in a noncommercial digital format, then for every page that includes OpenStax content, you must license the derivative work under the same CC-BY-NC-SA license as the original, and include on every digital page view the following attribution:

    Access for free at https://openstax.org/books/principles-finance-2e/pages/1-why-it-matters

Citation information

The information below includes the information needed to generate citations in most major styles (APA, MLA, etc.); you must reformat and organize the information as needed to fit the requirements of the style. Use the information below to generate a citation. We recommend using a citation tool such as this one.

© Jul 6, 2026 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike License. The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo, and Rice University name, and Rice University logo trademarks, or wordmarks are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.