Financial Management and Accounting Concepts Quiz

Test your knowledge with 12 questions on accounting principles, financial statements, and financial management concepts.

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Which of the following is an example of a current asset?

Land

Building

Inventory

Patent

What does ROI stand for in finance?

Return on Investment

Risk of Inflation

Revenue on Investment

Rate of Inflation

What is the formula for calculating net income?

Revenue - Expenses

Revenue + Expenses

Revenue / Expenses

Revenue * Expenses

What is the time value of money (TVM) principle?

A dollar today is worth more than a dollar in the future

A dollar today is worth less than a dollar in the future

A dollar today is worth the same as a dollar in the future

The value of money decreases over time

What is the purpose of depreciation in accounting?

To increase the value of assets

To decrease the value of liabilities

To allocate the cost of assets over their useful life

To record the sale of assets

Which of the following is not a component of working capital?

Accounts payable

Inventory

Accounts receivable

Long-term debt

What does EBITDA stand for in finance?

Earnings Before Interest, Taxes, Depreciation, and Amortization

Earnings Before Income and Taxes, Depreciation, and Amortization

Earnings Before Interest, Taxes, Depreciation, and Assets

Earnings Before Income, Taxes, Depreciation, and Assets

Which financial statement represents a company's financial position at a specific point in time?

Income statement

Cash flow statement

Balance sheet

Statement of retained earnings

Which accounting principle states that expenses should be recognized in the same period as the revenues to which they relate?

Matching principle

Revenue recognition principle

Consistency principle

Materiality principle

#10

What is the formula for calculating the debt-to-equity ratio?

Total Debt / Total Equity

Total Equity / Total Debt

Total Assets / Total Equity

Total Equity / Total Assets

#11

Which of the following is a measure of a company's profitability?

EBITDA

Working capital

Debt-to-equity ratio

Return on equity (ROE)

#12

Which accounting principle requires that assets and liabilities be recorded at their fair market value?

Going concern principle