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Accounting and Financial in Business MCQ

Accounting and Financial in Business MCQ

1. A(n) _______ worksheet projects the companys expected assets, liabilities, and equity.

Answer

Correct Answer: Balance sheet

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2. To speed up magnetic hard drive performance, ____ is often used.

Answer

Correct Answer: Disk caching

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3. Costs that increase as a firm acquires additional current assets are called _____ costs.

Answer

Correct Answer: Carrying

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4. Corporations usually employ _____ to help sell their securities in the primary market.

Answer

Correct Answer: Investment banking firms

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5. When a note receivable is honored, cash is debited for the note's ________ value.

Answer

Correct Answer: Maturity

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6. ________ stay constant over a wide range of volume.

Answer

Correct Answer: Costs per unit

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7. In the cost allocation process, an allocation base ________.

Answer

Correct Answer: Should be the cost driver of the costs in the particular activity pool

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8. Costs that do not vary according to production volume are called _____.

Answer

Correct Answer: Fixed costs

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9. An average quality lawn captures ______ times the carbon output of a typical gasoline-powered mower

Answer

Correct Answer: 4

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10. Economists summarize a country's transactions with other countries with a(n) _____ account.

Answer

Correct Answer: Balance of payments

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11. If ________, then the contribution margin ratio will increase.

Answer

Correct Answer: 100%.

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12. Business reports that list only totals, with no individual item details, are called ____.

Answer

Correct Answer: Summary reports

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13. Molding and sanding each unit of product would most likely be classified as a ________ cost.

Answer

Correct Answer: Unit-level

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14. Contribution margin is calculated by deducting ________ from sales revenue.

Answer

Correct Answer: Total variable costs

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15. An unfavorable flexible budget variance in variable costs suggests a(n) ________.

Answer

Correct Answer: Increase in variable cost per unit.

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16. An adjusting entry is completed ________.

Answer

Correct Answer: At the end of the accounting period

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17. A reference value involves comparing the costs and benefits of __________.

Answer

Correct Answer: Substitute items

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18. A company should ________ when making a shortminusterm special decision.

Answer

Correct Answer: Separate variable from fixed.

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19. If a company retires preferred stock, ________.

Answer

Correct Answer: Total stockholders' equity will decrease.

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20. A company selling a bond is ________ money.

Answer

Correct Answer: Borrowing

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21. A ____________ endorsement would be used if a person is presenting a check in order to obtain cash.

Answer

Correct Answer: Blank

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22. A bond's price volatility _________ at _________ rate as maturity increases.

Answer

Correct Answer: Increases; a decreasing

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23. When the total fixed costs increases, the contribution margin per unit ________.

Answer

Correct Answer: Remains the same

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24. When the sales price per unit decreases, the contribution margin per unit ________.

Answer

Correct Answer: Decreases

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25. Downloading a song from itunes is an example of a(n) ________ service.

Answer

Correct Answer: Convenience

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26. A summary book for recording all transactions and account balances is referred to as a/an ______.

Answer

Correct Answer: General ledger

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27. The goal of good cash-flow management is to ______.

Answer

Correct Answer: Have enough cash on hand when it is needed

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28. “Profit = Revenue − Expenses” represents the activity described in the ______.

Answer

Correct Answer: Income statement

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29. ______ refers to what the business owner has invested in the business.

Answer

Correct Answer: Equity

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30. Which of the following ratios measures the number of times the firm can cover its current liabilities with its current assets?

Answer

Correct Answer: Current ratio

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31. Why are financial statements important?

Answer

Correct Answer: In the event of an audit you can defend your decisions

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32. Single-entry accounting systems record the flow of income and expenses in a running log and allow the small business owner to produce ______.

Answer

Correct Answer: Monthly statements

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33. The ratios that measure the speed with which various accounts are converted into sales or cash and that are used to measure the efficiency of asset usage are known as ______.

Answer

Correct Answer: Activity ratios

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34. Financial statements that project what a firm’s financial condition will be in the future are known as ______.

Answer

Correct Answer: Pro forma financial statements

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35. The financial record that summarizes the income and expenses of the business over time is the ______.

Answer

Correct Answer: Income statement

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36. Calculations that compare the important financial aspects of a business are called ______.

Answer

Correct Answer: Financial ratios

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37. High average collection periods usually indicate ______.

Answer

Correct Answer: Many uncollected accounts receivable

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38. Which of the following financial actions should be made on a weekly basis by a small business manager?

Answer

Correct Answer: Note especially slow-paying accounts

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39. Each business day, 12 small businesses in the United States declare bankruptcy primarily for which of the following?

Answer

Correct Answer: Poor cash-flow management

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40. The measure of how long it takes a firm to convert a credit sale into a usable form is known as which of the following?

Answer

Correct Answer: Average collection period

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41. Trend analysis is a comparison of a single firm’s present performance with its own past performance preferably for more than _____.

Answer

Correct Answer: Two year

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42. Trend analysis is a comparison of a single firm’s present performance with its own _____ preferably for more than two years.

Answer

Correct Answer: Past Performance

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43. _____ is an asset utilization ratio that measures how efficiently the firm uses all of its assets to generate sales.

Answer

Correct Answer: Total asset turnover

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44. Times Interest earned is a leverage ratio that calculates the firm’s ability to meet its interest requirements.

Answer

Correct Answer: True

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45. Statement of cash flow is a financial statement that shows the cash _____ of a business.

Answer

Correct Answer: Both a and b

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46. _____ is a financial statement that shows the cash inflows and outflows of a business.

Answer

Correct Answer: Cash flow statement

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47. SIngle Entry accounting is an accounting system in which the flow of _____ is recorded in a running log.

Answer

Correct Answer: Both a and b

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48. SIngle entry accounting is basically a checkbook.

Answer

Correct Answer: True

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49. _____ is a profitability ratio that measures the return the firm earned on its owner’s investment in the firm.

Answer

Correct Answer: Return on Equity

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50. _____ is a profitability ratio that indicates the firm’s effectiveness in generating profits from its available assets.

Answer

Correct Answer: Both a and b

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51. _____ is a financial ratio that measures a firm’s ability to meet its current obligations with the most liquid of its current assets.

Answer

Correct Answer: Quick ratio

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52. _____ is financial statements that project what a firm’s financial condition will be in the future.

Answer

Correct Answer: Pro Forma Financial Statements

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53. _____ is a financial ratio that is used to measure the ability of a company to turn sales into profits and to earn profits on assets and owner’s equity committed.

Answer

Correct Answer: Profitability Ratios

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54. Owner's Equity is the amount of money the owner of a business would receive if some of the assets were sold and all liabilities were paid.

Answer

Correct Answer: False

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55. Net profit margin is a profitability ratio that measures the percentage of each sales dollar that remains as profit after all _____.

Answer

Correct Answer: Both a and b

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56. _____ is a list of accounts receivable showing each customer, the amount that customer owes, and the amount that is past due.

Answer

Correct Answer: Micro-Aging Schedule

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57. _____ is a list of accounts receivable by age category.

Answer

Correct Answer: Macro-Aging Schedule

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58. _____ is a financial ratio used to measure a firm’s ability to meet its short-term obligations to creditors as they come due.

Answer

Correct Answer: Liquidity ratios

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59. Liabilities is a debt owed by a business to another _____.

Answer

Correct Answer: Both a and b

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60. _____ is a financial ratio that measures the extent to which a firm uses debt as a source of financing and its ability to service that debt.

Answer

Correct Answer: Leverage ratios

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61. Journal is a _____ of all financial transactions of a business.

Answer

Correct Answer: Chronological record

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62. Inventory Turnover is an asset utilization ratio that measures the liquidity of the firm’s inventory—how quickly goods are _____.

Answer

Correct Answer: Both a and b

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63. Industry Average Analysis is a comparison of a firm’s _____ to the industry averages.

Answer

Correct Answer: Financial ratio

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64. Income statement is a financial statement that shows the revenue and expenses of a firm, allowing you to calculate the _____ produced in a specific period of time.

Answer

Correct Answer: Both a and b

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65. Generally Accepted Accounting Principles (GAAP) is a standard established so that all businesses produce _____ financial statements.

Answer

Correct Answer: Comparable

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66. General Ledger is a record of all financial transactions divided into accounts and usually compiled at the end of each _____ .

Answer

Correct Answer: Month

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67. Fixed asset turnover is an asset utilization ratio that measures how _____ a firm is using its assets to generate sales.

Answer

Correct Answer: Efficiently

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68. _____ is a calculation that compares important financial aspects of a business.

Answer

Correct Answer: Financial ratio

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69. Double-Entry accounting is an accounting system in which every business transaction is recorded in an _____ so that the system will balance.

Answer

Correct Answer: All of these

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70. _____ is a leverage ratio that measures the proportion of a firm’s total assets that is acquired with borrowed funds.

Answer

Correct Answer: Debt ratio

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71. _____ is a financial ratio that measures the number of times a firm can cover its current liabilities with its current assets.

Answer

Correct Answer: Current ratio

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72. A financial statement that includes a percentage breakdown of each item.

Answer

Correct Answer: Common size financial statement

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73. _____ is the period of time from when money is spent on raw mate-rials until it is collected from the sale of a finished good.

Answer

Correct Answer: Cash-To-Cash Cycle

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74. The difference between the actual amount of cash a company brings in and the actual amount of cash a company disburses in a given time period is known as Cash flow.

Answer

Correct Answer: True

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75. Cash flow is the sum of net income plus any noncash expenses, such as:

Answer

Correct Answer: Both a and b

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76. Cash budgets is a plan for _____ uses and sources of cash.

Answer

Correct Answer: Short-term

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77. Cash-Basis method is a method of accounting in which _____ are recorded at the time they are paid, rather than when they are incurred.

Answer

Correct Answer: Both a and b

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78. Select the correct options for credit sales in Average collection period:

Answer

Correct Answer: Internal store credit

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79. Asset Utilization Ratios are the financial ratios that measure the speed with which various asset accounts are converted into _____ ?

Answer

Correct Answer: Both a and b

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80. Assets are any resources that?

Answer

Correct Answer: Both a and c

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81. Aging Schedules is a listing of a Company’s firm receivable according to the length of time they are outstanding.

Answer

Correct Answer: False

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82. Accrual basis method is a method of accounting in which _____ are recorded at the time they are incurred rather than when they are paid.

Answer

Correct Answer: Both a and b

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83. Which one of these is an example of Accounting?

Answer

Correct Answer: All of theses

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