Question 1

Ratios that are used to examine an establishment's ability to meet its long-term financial obligations are termed _____________ ratios.

Accepted Answer

A)   liquidity
B)   solvency
C)   profitability
D)   operating B

Question 2

Jim had a beginning inventory of $5,500. During the month of April he purchased $4,000 of food and had an ending inventory of $3,800 at the end of the month. His sales for April were $8,750. What was his inventory turnover?

Accepted Answer

A)   1.2 times
B)   45.7%
C)   86:1
D)   1.88 turns A

Question 3

A foodservice operation with a food cost of 40% has food costs that are equal to 40% of _____________.

Accepted Answer

A)   total costs
B)   labor costs
C)   operating costs
D)   revenue D

Question 4

Having customers pay by the ounce for items purchased on sandwich or salad bars is an example of

Accepted Answer

A)   actual cost pricing.
B)   product marketing.
C)   sociocultural factor planning.
D)   pricing psychology.

Question 5

A ______________ provides a visual way to quickly access financial performance.

Accepted Answer

The answer of A ______________ provides a visual way to...

Question 6

Cash, marketable securities, and accounts receivable are all categorized as _____________ on a balance sheet.

Accepted Answer

A)   owner's equity
B)   current liabilities
C)   fixed assets
D)   current assets

Question 7

The fundamental accounting equation is assets = liabilities + owners equity.

Accepted Answer

A) True 
 B)False

Question 8

Perception of value

Accepted Answer

A)   is what the manager believes should be charged for menu items.
B)   is used by managers in determining the type of production equipment to purchase.
C)   is a rating used by customers in choosing a new restaurant in which to dine.
D)   is what customers believe a menu item is worth.

Question 9

A pro forma income statement

Accepted Answer

A)   displays revenues and expenses for the past month.
B)   summarizes sales and expenditures for the previous year.
C)   forecasts revenue and expenses for a future period.
D)   is used to complete a common-size income statement.

Question 10

Improving the bottom line in an organization can occur either by increasing revenues or reducing costs

Accepted Answer

A) True 
 B)False

Question 11

A high inventory turnover ratio indicates large amounts of money are tied up in inventory.

Accepted Answer

A) True 
 B)False

Question 12

One difference between a for-profit and a not-for-profit organization is

Accepted Answer

A)   a for-profit organization will budget for a profit each year and a not-for-profit will budget to break-even.
B)   a for-profit organization will prepare an income statement and balance sheet each year, a not-for-profit will not prepare these statements.
C)   a for-profit organization is not operated for anyone's personal gain, a not-for- profit operation is expected to provide a return for its investors.
D)   excess revenue over expenses, in a for-profit organization can go to the organization's owners, in a not-for-profit organization this excess goes back into the organization.

Question 13

A comparison of ratios over several periods of time is termed trend analysis.

Accepted Answer

A) True 
 B)False

Question 14

Typically the first step in the budget process is to compile the

Accepted Answer

A)   expenditure budget.
B)   sales budget.
C)   capital expenditure budget.
D)   pro forma income statement.

Question 15

Which of the following costs is typically the highest in a foodservice operation?

Accepted Answer

A)   food
B)   labor
C)   supplies
D)   overhead

Question 16

Sam Jones owns a local restaurant. He buys steaks from the restaurant to serve his family at home for dinner. Sam should record this sale in the restaurant's books because of the

Accepted Answer

A)   business entity principle.
B)   going-concern concept.
C)   cost principle.
D)   materiality principle.

Question 17

Cashiers who take cash from customers should be the ones to count cash drawers and reconcile with cash register receipts

Accepted Answer

A) True 
 B)False

Question 18

Calculation of the current ratio would involve which two pieces of data?

Accepted Answer

A)   Total assets and total liabilities.
B)   Current assets and current liabilities.
C)   Total revenue and total expenses.
D)   Net profit and total sales.

Question 19

Sarah Michaels wants to evaluate her operation's efficiency by calculating the number of labor minutes per meal. Data from the previous week indicate that she served 7,500 meals. Her timecards indicated that employees worked a total of 625 hours for the week. What were labor minutes per meal for Sarah's operation?

Accepted Answer

A)   .08
B)   5
C)   12
D)   15

Question 20

The cost method of accounting differs from the accrual method in that expenses are recorded when they are incurred in the cost method and when they are paid in the accrual method.

Accepted Answer

A) True 
 B)False

Exam 13: Management of Financial Resources

Ratios that are used to examine an establishment's ability to meet its long-term financial obligations are termed _____________ ratios.

Jim had a beginning inventory of $5,500. During the month of April he purchased $4,000 of food and had an ending inventory of $3,800 at the end of the month. His sales for April were $8,750. What was his inventory turnover?

A foodservice operation with a food cost of 40% has food costs that are equal to 40% of _____________.

Having customers pay by the ounce for items purchased on sandwich or salad bars is an example of

A ______________ provides a visual way to quickly access financial performance.

Cash, marketable securities, and accounts receivable are all categorized as _____________ on a balance sheet.

The fundamental accounting equation is assets = liabilities + owners equity.

Perception of value

A pro forma income statement

Improving the bottom line in an organization can occur either by increasing revenues or reducing costs

A high inventory turnover ratio indicates large amounts of money are tied up in inventory.

One difference between a for-profit and a not-for-profit organization is

A comparison of ratios over several periods of time is termed trend analysis.

Typically the first step in the budget process is to compile the

Which of the following costs is typically the highest in a foodservice operation?

Sam Jones owns a local restaurant. He buys steaks from the restaurant to serve his family at home for dinner. Sam should record this sale in the restaurant's books because of the

Cashiers who take cash from customers should be the ones to count cash drawers and reconcile with cash register receipts

Calculation of the current ratio would involve which two pieces of data?

The cost method of accounting differs from the accrual method in that expenses are recorded when they are incurred in the cost method and when they are paid in the accrual method.