#1
Which of the following is a fundamental accounting equation?
Assets = Liabilities - Equity
Assets = Liabilities + Equity
Assets - Liabilities = Equity
Assets / Liabilities = Equity
#2
What does ROI stand for in finance?
Return on Investment
Revenue of Interest
Risk of Investment
Rate of Inflation
#3
What is the primary purpose of financial accounting?
To forecast future financial performance
To provide information for internal decision-making
To report financial information to external parties
To facilitate communication between departments within a company
#4
Which of the following is considered a long-term liability?
Accounts Payable
Accrued Expenses
Notes Payable
Salaries Payable
#5
What is the formula to calculate earnings per share (EPS)?
Net Income / Total Equity
Net Income / Total Assets
Net Income / Total Liabilities
Net Income / Average Number of Shares Outstanding
#6
Which financial statement provides a snapshot of a company's financial position at a specific point in time?
Income Statement
Balance Sheet
Statement of Cash Flows
Statement of Retained Earnings
#7
What does the term 'EBITDA' stand for in finance?
Earnings Before Income and Taxes Depreciation and Amortization
Estimated Business Income Tax Deduction Analysis
Effective Business Investment Tracking and Data Analysis
Economic Balance and Income Trend Analysis
#8
Which financial statement reports a company's revenues and expenses over a specific period?
Income Statement
Balance Sheet
Statement of Cash Flows
Statement of Retained Earnings
#9
What is the formula for calculating the net profit margin?
(Net Income / Revenue) * 100%
(Net Income / Total Assets) * 100%
(Net Income / Total Equity) * 100%
(Net Income / Total Liabilities) * 100%
#10
What is the time value of money principle?
Money loses value over time due to inflation
A dollar today is worth more than a dollar in the future
Interest rates remain constant over time
Future cash flows are not affected by present decisions
#11
Which of the following is a measure of a company's profitability?
Working Capital
Operating Cash Flow
Gross Profit Margin
Accounts Receivable Turnover
#12
What is the formula for calculating the debt-to-equity ratio?
Total Debt / Total Equity
Total Equity / Total Assets
Total Debt / Total Assets
Total Assets / Total Equity
#13
Which of the following is a measure of a company's efficiency in using its assets to generate revenue?
Return on Equity (ROE)
Inventory Turnover Ratio
Debt-to-Equity Ratio
Price-to-Earnings (P/E) Ratio
#14
What is the formula for calculating the quick ratio?
(Current Assets - Inventory) / Current Liabilities
Current Assets / Current Liabilities
(Current Assets - Accounts Receivable) / Current Liabilities
Total Assets / Total Liabilities
#15
Which of the following financial ratios measures a company's ability to pay off its short-term liabilities with its current assets?
Debt-to-Equity Ratio
Current Ratio
Return on Assets Ratio
Earnings Per Share Ratio
#16
What is the purpose of financial leverage?
To reduce the company's financial risk
To increase the company's liquidity
To increase the company's return on equity
To decrease the company's debt-to-equity ratio
#17
What is the purpose of the cash flow statement?
To provide information about a company's financial position at a specific point in time
To report a company's revenues and expenses over a specific period
To show how changes in balance sheet accounts and income affect cash and cash equivalents
To analyze a company's profitability and return on investment
#18
What does the term 'WACC' stand for in finance?
Weighted Average Cost of Capital
Working Asset Cost Calculation
Wealth Asset Cash Conversion
Worldwide Asset Cost Calculation
#19
Which of the following financial ratios measures a company's ability to generate profit from its sales?
Debt-to-Equity Ratio
Operating Profit Margin
Current Ratio
Return on Assets Ratio