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Business Finance MCQ

1. A firm's bond rating slips by 1 category for each ______ in current debt interest.

Additional 0.5%

Additional 1.0%

5.0% decrease.

10.0% decrease

Answer

Correct Answer: Additional 0.5%

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2. What type of accounting approach is Accrual basis accounting?

Cash based accounting

Most common approach used by larger businesses

Double entry based accounting

Budgetary accounting

Answer

Correct Answer: Most common approach used by larger businesses

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3. What is the purpose of creating a balance sheet?

To track expenses and revenue

To give a snapshot of the company's net worth

To summarize all debts owed by the company

To measure company profits

Answer

Correct Answer: To give a snapshot of the company's net worth

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4. What is the accrual basis of accounting?

An accounting method of recording income when it’s actually earned and expenses when they actually occur

An accounting method of recording income and expenses on a monthly basis

An accounting method of recording expenses before they occur

An accounting method of recording income when it’s paid and expenses when they are paid

Answer

Correct Answer: An accounting method of recording income when it’s actually earned and expenses when they actually occur

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5. What is the meaning of Accounts Receivables?

Money owed by a small business to others for goods or services purchased

Money used to purchase goods or services

Money held by a small business for goods sold

Money owed to a small business by others for goods or services rendered

Answer

Correct Answer: Money owed to a small business by others for goods or services rendered

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6. What does Accounts Payable represent?

Obligations to pay debts owed to lenders, suppliers, and creditors

Assets owned by the business

Debts owed by the business

Profits made by the business

Answer

Correct Answer: Obligations to pay debts owed to lenders, suppliers, and creditors

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Construction Management Engineering MCQs | Topic-wise

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