Question 1

The income statement shows a firm's financial position on a specific date.

Accepted Answer

A) True 
 B)False

Question 2

The income statement shows the profit or loss from a firm's operations over a given period of time.

Accepted Answer

A) True 
 B)False

Question 3

A company has revenues of $700,000; invested capital of $3,000,000; total debt of $ 1,500,000 of which it pays 2.5% interest; current,long-term,and other assets totalling $4,000,000; and total expenses of $550,000.What is the company's operating profit margin?

Accepted Answer

A)  0.04 
B)  0.18 
C)  0.21 
D)  0.50 
A)  0.04 
B)  0.18 
C)  0.21 
D)  0.50

Question 4

Janice owns a decorative tile business that services the construction industry.In October her company sold 800 boxes of tiles at a price of $150 per box that cost her $70 per box.Her rent,utilities,and salaries for the month totaled $3,000.Her company's tax rate is 22%.What amount of sales did Janice have in October?

Accepted Answer

A)  $41,340 
B)  $53,000 
C)  $64,000 
D)  $120,000 
A)  $41,340 
B)  $53,000 
C)  $64,000 
D)  $120,000

Question 5

Describe the importance of the cash flow statement.

Accepted Answer

One of the most critical financial issue

Question 6

A company has cash of $350,000,common shares of $500,000,net income of $125,000,and sales of $400,000.What is the company's return on equity?

Accepted Answer

A)  0.25 
B)  0.31 
C)  0.70 
D)  0.80 
A)  0.25 
B)  0.31 
C)  0.70 
D)  0.80

Question 7

Explain what a cash budget is.

Accepted Answer

The cash budget lists the cash

Question 8

One approach to measuring liquidity is to use the current ratio.

Accepted Answer

A) True 
 B)False

Question 9

A business owner wishes to raise money to finance a marketing strategy.She decides to raise the money by selling ownership to her company.What will the business owner sell?

Accepted Answer

A)  retained earnings 
B)  long-term assets 
C)  current assets 
D)  common stock 
A)  retained earnings 
B)  long-term assets 
C)  current assets 
D)  common stock

Question 10

Which factor affects the operating profit margin?

Accepted Answer

A)  number of units or product or services sold 
B)  number of units or product or services bought 
C)  relationships with suppliers 
D)  potential customers identified by sales people 
A)  number of units or product or services sold 
B)  number of units or product or services bought 
C)  relationships with suppliers 
D)  potential customers identified by sales people

Question 11

Operating expenses are costs related to administrative expenses.

Accepted Answer

A) True 
 B)False

Question 12

Financial statements provide fairly good estimates of a company's financial performance.

Accepted Answer

A) True 
 B)False

Question 13

What is return on equity?

Accepted Answer

A)  the ratio of total debt to total assets 
B)  the rate of interest on an outstanding loan 
C)  the rate of return that owners earn on their investment 
D)  the relationship of sales to fixed assets 
A)  the ratio of total debt to total assets 
B)  the rate of interest on an outstanding loan 
C)  the rate of return that owners earn on their investment 
D)  the relationship of sales to fixed assets

Question 14

Operating profits is earnings after interest and taxes are paid.

Accepted Answer

A) True 
 B)False

Question 15

Cindy is a college student working in the accounting department of a company for a co-op program.She is learning about accounting and asks her supervisor how she should classify the salaries paid to employees.What will the supervisor tell Cindy?

Accepted Answer

A)  Salaries paid are an operating expense. 
B)  Salaries paid are assets. 
C)  Salaries paid are liabilities. 
D)  Salaries paid are dividends. 
A)  Salaries paid are an operating expense. 
B)  Salaries paid are assets. 
C)  Salaries paid are liabilities. 
D)  Salaries paid are dividends.

Question 16

Liquidity is the ability of a firm to meet maturing debt obligations by having adequate working capital available.

Accepted Answer

A) True 
 B)False

The income statement shows a firm's financial position on a specific date.

The income statement shows the profit or loss from a firm's operations over a given period of time.

A company has revenues of $700,000; invested capital of $3,000,000; total debt of $ 1,500,000 of which it pays 2.5% interest; current,long-term,and other assets totalling $4,000,000; and total expenses of $550,000.What is the company's operating profit margin?

Describe the importance of the cash flow statement.

A company has cash of $350,000,common shares of $500,000,net income of $125,000,and sales of $400,000.What is the company's return on equity?

Explain what a cash budget is.

One approach to measuring liquidity is to use the current ratio.

A business owner wishes to raise money to finance a marketing strategy.She decides to raise the money by selling ownership to her company.What will the business owner sell?

Which factor affects the operating profit margin?

Operating expenses are costs related to administrative expenses.

Financial statements provide fairly good estimates of a company's financial performance.

What is return on equity?

Operating profits is earnings after interest and taxes are paid.

Cindy is a college student working in the accounting department of a company for a co-op program.She is learning about accounting and asks her supervisor how she should classify the salaries paid to employees.What will the supervisor tell Cindy?

Liquidity is the ability of a firm to meet maturing debt obligations by having adequate working capital available.

Entrepreneurs

Start-Up and the Need for Competitive Advantage

Family Enterprise

Franchising and Buyouts

Developing an Effective Business Plan

Small Business Marketing, Product, and Pricing Strategies

Distribution and Promotional Strategies

Global Marketing

The New Venture Team, Small Firm Management, and Managing Human Resources

Form of Organization and Legal Issues

Selecting a Location and Planning the Facilities

Operations Management and Control Systems

Sources of Financing

Managing Growing Firms and Exit Strategies

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Exam 13: Understanding Financial Statements and Forecasting

The income statement shows a firm's financial position on a specific date.

The income statement shows the profit or loss from a firm's operations over a given period of time.

A company has revenues of $700,000; invested capital of $3,000,000; total debt of $ 1,500,000 of which it pays 2.5% interest; current,long-term,and other assets totalling $4,000,000; and total expenses of $550,000.What is the company's operating profit margin?

Describe the importance of the cash flow statement.

A company has cash of $350,000,common shares of $500,000,net income of $125,000,and sales of $400,000.What is the company's return on equity?

Explain what a cash budget is.

One approach to measuring liquidity is to use the current ratio.

A business owner wishes to raise money to finance a marketing strategy.She decides to raise the money by selling ownership to her company.What will the business owner sell?

Which factor affects the operating profit margin?

Operating expenses are costs related to administrative expenses.

Financial statements provide fairly good estimates of a company's financial performance.

What is return on equity?

Operating profits is earnings after interest and taxes are paid.

Cindy is a college student working in the accounting department of a company for a co-op program.She is learning about accounting and asks her supervisor how she should classify the salaries paid to employees.What will the supervisor tell Cindy?

Liquidity is the ability of a firm to meet maturing debt obligations by having adequate working capital available.

Entrepreneurs

Start-Up and the Need for Competitive Advantage

Family Enterprise

Franchising and Buyouts

Developing an Effective Business Plan

Small Business Marketing, Product, and Pricing Strategies

Distribution and Promotional Strategies

Global Marketing

The New Venture Team, Small Firm Management, and Managing Human Resources

Form of Organization and Legal Issues

Selecting a Location and Planning the Facilities

Operations Management and Control Systems

Sources of Financing

Managing Growing Firms and Exit Strategies

Filters