#1
What is the primary goal of financial accounting?
To measure and report financial information to external parties
ExplanationExternal financial reporting.
#2
Which financial statement provides information about a company's profitability?
Income statement
ExplanationReports revenues and expenses, showing profitability.
#3
Which financial ratio measures a company's ability to meet short-term obligations?
Current ratio
ExplanationCompares current assets to current liabilities.
#4
What is the purpose of a cash flow statement?
To report a company's cash inflows and outflows during a period
ExplanationShows how cash moves in and out of a business.
#5
Which of the following is NOT considered an economic resource?
Money
ExplanationMoney is a medium of exchange, not a resource.
#6
Which financial statement reports changes in a company's retained earnings?
Statement of retained earnings
ExplanationShows how retained earnings changed over time.
#7
What does SWOT analysis stand for in business?
Strengths, Weaknesses, Opportunities, Threats
ExplanationAnalyzing internal and external factors.
#8
What is the formula for calculating Return on Investment (ROI)?
(Ending Value - Beginning Value) / Beginning Value
ExplanationMeasures profitability relative to investment.
#9
What is the purpose of a SWOT analysis in business?
To assess internal and external factors affecting a company
ExplanationEvaluates company's environment for strategic planning.
#10
Which of the following is a characteristic of perfect competition?
Homogeneous products
ExplanationProducts are identical across firms.
#11
What is the purpose of a break-even analysis?
To identify the point at which total revenue equals total costs
ExplanationDetermines when a business covers all costs.
#12
What does PESTLE analysis assess?
External macro-environmental factors
ExplanationEvaluates political, economic, social, technological, legal, and environmental factors.
#13
Which of the following is NOT a characteristic of a sole proprietorship?
Limited liability for the owner
ExplanationOwner's liability is unlimited in a sole proprietorship.
#14
What does EBITDA stand for?
Earnings Before Interest, Taxes, Depreciation, and Amortization
ExplanationMeasures operating performance without certain expenses.
#15
Which of the following is a characteristic of a monopoly?
Single seller dominating the market
ExplanationOne firm controls the market.
#16
What is the formula for calculating gross profit margin?
(Net Sales - Cost of Goods Sold) / Net Sales
ExplanationShows profitability after accounting for production costs.
#17
Which of the following is NOT a characteristic of a corporation?
Managed by a single owner
ExplanationCorporations have multiple owners.