#1
What is the formula to calculate simple interest?
(P × r × t) / 100
ExplanationPrincipal multiplied by rate multiplied by time divided by 100
#2
What does ROI stand for in finance?
Return on Investment
ExplanationMeasure of investment profitability
#3
What does GAAP stand for in accounting?
Generally Accepted Accounting Principles
ExplanationStandardized principles and guidelines for financial accounting
#4
Which financial statement reports a company's revenues and expenses over a specific period?
Income Statement
ExplanationSummary of company's financial performance over time
#5
What is the accounting equation?
Assets = Liabilities + Equity
ExplanationRelationship between a company's resources and its obligations
#6
What does EPS stand for in finance?
Earnings Per Share
ExplanationPortion of company's profit allocated to each outstanding share of common stock
#7
Which accounting principle states that revenue should be recognized when it is earned, regardless of when the cash is received?
Revenue Recognition Principle
ExplanationRevenue recorded when earned, not when cash is received
#8
What is the formula to calculate compound interest?
P × (1 + r)^t
ExplanationPrincipal multiplied by one plus rate raised to the power of time
#9
What is the formula to calculate return on investment (ROI)?
(Net Profit / Cost of Investment) × 100
ExplanationRatio of net profit to cost of investment, expressed as a percentage
#10
What does FIFO stand for in accounting?
First-In, First-Out
ExplanationInventory valuation method where oldest inventory is sold first
#11
Which financial ratio measures a company's ability to pay its short-term debts?
Current Ratio
ExplanationComparison of current assets to current liabilities
#12
What is the formula to calculate the present value of a future cash flow?
FV / (1 + r)^n
ExplanationFuture value divided by one plus rate raised to the power of time
#13
Which financial statement shows a company's financial position at a specific point in time?
Balance Sheet
ExplanationSnapshot of company's financial status at a given time
#14
Which financial ratio measures a company's efficiency in using its assets to generate revenue?
Return on Assets (ROA)
ExplanationProfitability relative to assets
#15
What is the formula to calculate the net present value (NPV) of cash flows?
Σ(CF / (1 + r)^n)
ExplanationSum of cash flows discounted to present value