Financial Statements Quiz

Test your knowledge of the three primary financial statements with this handwritten quiz. The three financial statements are the income statement, the balance sheet, and the cash flow statement. In the video series available on ASM, the financial statements are introduced in the context of building a three-statement model, which provides the foundation for most in-depth financial analysis and valuation work. The objective is not simply to explain what they are, but to demonstrate how they link to each other.

But if you want to get good at something, it really helps to test yourself. I’ve included some additional notes on the learning process, but if you would prefer to dive in, download the quiz and work through it to see how well you understand these concepts. Download: ASM Handwritten Quiz_Intro to Financial Statements

Illusion of Fluency: If you read a text or watch a video explanation several times it is not uncommon for the human mind to mistake familiarity with mastery of content. This is particularly true if the explanation covers a complex topic in a lucid and easy-to-follow format. Under these circumstances it’s possible to convince yourself that it’s all pretty simple and you knew it all along.[1]

Not until you are asked to produce explanations yourself will you realize what you truly do and do not recall. This makes testing and feedback integral to the learning process. It also suggests that learning may not always feel natural. If fluency illusions result from lucid presentations of concepts, it follows that struggling with the material can be beneficial to learning:

“We usually think of interference as a detriment to learning, but certain kinds of interference can produce learning benefits, and the positive effects are sometimes surprising. Would you rather read an article that has normal type or type that’s somewhat out of focus? Almost surely you would opt for the former. Yet when text on a page is slightly out of focus or presented in a font that is a little difficult to decipher, people recall the content better.” [2]

If you find yourself struggling with the quiz questions, resist the urge to look up answers immediately. Do your best to answer and then retrieve the answer. It will enhance the learning process.

The Power of Handwritten Notes: There is only so much that can be accomplished with multiple choice and fill-in-the-blank quizzes. These formats are helpful because they provide the ability to immediately show results, which is critical to the learning process. But between the two, research shows that fill-in-the-blank is more effective because it requires retrieving the answer from memory without the ease of selecting from a list of options. It follows, that writing answers in longhand takes this benefit a step further, even more so than typing:

“Students who took handwritten notes generally outperformed students who typed their notes via computer, researchers at Princeton University and the University of California at Los Angeles found.” [3]

Vocabulary: In my experience, people who claim that they simply cannot understand finance don’t spend enough time on vocabulary. The math is pretty simple. It’s just explained in a different language. Learn the language and everything else will follow. For more on this topic please read the following: ASM On Learning.

To help with this I have created the following exercise: Complete the quiz available for download (see below) by hand and without any aids. If you find yourself struggling with any of the vocabulary, take the time to stop and write the definition in your own words. The answers are not included. You will find a reference to the source material at the bottom of each slide. The idea is to encourage ASM users to go back to the material and find or confirm their own answers. Good luck!

Download: ASM Handwritten Quiz_Intro to Financial Statements


1. Peter C. Brown, Henry L. Roediger III, Mark A. McDaniel, Make it Stick: The Science of Successful Learning (Cambridge: The Belknap Press of Harvard University Press, 2014), p. 116
2. Peter C. Brown, Henry L. Roediger III, Mark A. McDaniel, Make it Stick: The Science of Successful Learning (Cambridge: The Belknap Press of Harvard University Press, 2014), p. 87
3. Hotz, Robert Lee. “The Power of Handwriting.” The Wall Street Journal 5 April 2016. Print