#1
What is depreciation in accounting?
A decrease in the value of an asset over time
ExplanationDecrease in asset value over time
#2
Which financial statement reports a company's revenues and expenses?
Income statement
ExplanationReports revenues and expenses
#3
What is the purpose of a cash flow statement?
To analyze a company's sources and uses of cash during a period
ExplanationAnalyzes cash sources and uses
#4
What is a 'write-off' in accounting?
The removal of an asset from a company's books because it is no longer considered valuable
ExplanationRemoving asset due to lack of value
#5
Which of the following is an example of a long-term liability?
Bonds payable
ExplanationExample of long-term liability
#6
Which financial statement shows a company's cash inflows and outflows during a specific period?
Cash flow statement
ExplanationShows cash inflows and outflows
#7
Which financial ratio measures a company's ability to cover its short-term liabilities with its liquid assets?
Current Ratio
ExplanationMeasures ability to cover short-term liabilities with liquid assets
#8
What does EBITDA stand for in finance?
Earnings Before Interest, Taxes, Depreciation, and Amortization
ExplanationEarnings before certain expenses
#9
What is the formula for calculating the current ratio?
Current assets / Current liabilities
ExplanationRatio of current assets to liabilities
#10
What is the purpose of the DuPont analysis?
To assess a company's profitability drivers
ExplanationAssesses profitability drivers
#11
What does the term 'working capital' represent?
The difference between current assets and current liabilities
ExplanationDifference between current assets and liabilities
#12
What is the purpose of financial ratios?
To evaluate a company's financial health and performance relative to other companies or industry averages
ExplanationEvaluates financial health relative to peers
#13
What is the purpose of the debt-to-equity ratio?
To assess a company's financial leverage
ExplanationAssesses financial leverage
#14
What is the primary function of the Securities and Exchange Commission (SEC) in the United States?
To oversee the issuance and trading of securities
ExplanationOversees securities issuance and trading
#15
In finance, what does the term 'liquidity' refer to?
The ability to convert assets into cash quickly without significant loss
ExplanationAbility to convert assets to cash without loss