#1
Which of the following is an example of a variable cost in a business?
Utilities bill
ExplanationVariable costs fluctuate based on business activity, such as utility bills that vary with usage.
#2
Which financial statement provides an overview of a company's financial position at a specific point in time?
Balance Sheet
ExplanationThe Balance Sheet summarizes assets, liabilities, and equity at a specific moment, offering a snapshot of financial health.
#3
Which of the following is a characteristic of a sole proprietorship?
Unlimited liability
ExplanationSole proprietorships have unlimited liability, meaning the owner is personally responsible for business debts.
#4
What is the primary purpose of financial management in a business?
To maximize shareholder wealth
ExplanationFinancial management aims to optimize shareholder value by making strategic financial decisions.
#5
What does the term 'ROI' stand for in the context of financial management?
Return on Investment
ExplanationROI measures the profitability of an investment, indicating the return generated relative to its cost.
#6
What does the term 'EBITDA' stand for in the context of financial management?
Earnings Before Interest and Taxes Depreciation and Amortization
ExplanationEBITDA is a measure of a company's operating performance, excluding interest, taxes, and non-cash expenses.
#7
What is the primary function of an income statement in financial management?
To show a company's revenue and expenses
ExplanationThe income statement details revenue and expenses, revealing profitability over a specific period.
#8
Which of the following is an example of an intangible asset in a business?
Goodwill
ExplanationGoodwill is an intangible asset representing the premium a company pays for a favorable reputation or brand.
#9
What does the term 'Dividend' mean in the context of financial management?
Payment to shareholders from a company's profits
ExplanationDividends are distributions of profits to shareholders, providing a return on their investment.