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Ib Business And Management Accounts & Finance: 3.5 Financial Accounts

100 Questions  I  By [email protected]
 

  
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1.  _____________: A financial obligation of a business that it is required to repay in the future
2.  Current assets do not include
A.
B.
C.
D.
3.  Slater Tiling Company has an opening stock of $35 000, a closing stock of $30 000, and has purchased stock during the year costing $95 000. Calculate the firm's cost of goods sold (COGS)
A.
B.
C.
D.
4.  Current assets do not include
A.
B.
C.
D.
5.  Capital employed does not include the calculation of
A.
B.
C.
D.
6.  De Melo Consultancy uses the declining balance method to depreciate its fixed assets. The firm purchases computers worth $300 000 and uses a depreciation rate of 30%. The computers are expected to last five years before being replaced. What would the annual depreciation charge be if the company had used the straight line depreciation method for the computers?
A.
B.
C.
D.
7.  _____________: Cash and other assets expected to be exchanged for cash or consumed within a year; e.g., inventories, accounts payable (debtors) and cash/bank balance
8.  Net assets refers to the difference between a firm's total assets and its current liabilities
A.
B.
9.  The main benefit to a firm using the LIFO, rather than the FIFO, method of stock control is that
A.
B.
C.
D.
10.  The profit and loss account
A.
B.
C.
D.
11.  ___________ = gross profit - overhead expenses
12.  Which of the following statements does not usually apply to fixed assets?
A.
B.
C.
D.
13.     Refer to the information below and calculate the firm's total dividend payout to shareholders.
A.
B.
C.
D.
14.  Motor vehicles tend to depreciate most in value at the beginning of their useful life
A.
B.
15.  Bank overdrafts and creditors are examples of current liabilities
A.
B.
16.  Which of the following is a business not legally obliged to report?
A.
B.
C.
D.
17.  Historic cost is the original price that a firm paid for the purchase of a fixed asset
A.
B.
18.  The profit figure shown in a profit and loss account is an accurate estimate which may be revised at a later date
A.
B.
19.  Work out the value of net current assets from the information given
A.
B.
C.
D.
20.  Interest payable means
A.
B.
C.
D.
21.  Which of the following items does not appear in a profit and loss account?
A.
B.
C.
D.
22.  The Trading Account gives details of
A.
B.
C.
D.
23.  If expenses are greater than gross profit for a business, then the business
A.
B.
C.
D.
24.  Intangible assets are
A.
B.
C.
D.
25.   _______________: The profit left after all deductions, including dividends, have been made. This is 'ploughed back' into the company as a source of finance
26.  Sole traders and partnerships are not required by law to publish their final accounts publicly.
A.
B.
27.  Which statement cannot be applied to goodwill?
A.
B.
C.
D.
28.  An increase in the value of certain fixed assets, sucha s land and buildings, is known as
A.
B.
C.
D.
29.  Work out the value of net profit from the following information
A.
B.
C.
D.
30.     Refer to the information below and calculate the firm's gross profit.
A.
B.
C.
D.
31.  It is not a legal requirement for all companies to show their shareholders the sources and use of finances
A.
B.
32.  Hoopers Toys Ltd purchases goods at $10 000 and manages to sell these for $18 000. State the gross profit
A.
B.
C.
D.
33.  A business earns $200 000 in sales, has expenses of $80 000 and cost of goods sold are $90 000. What is the gross profit?
A.
B.
C.
D.
34.  Suppose a firm has opening stock of $5 000, purchases of $6 000 and cost of goods sold at $8 000. What is the value of its closing stock?
A.
B.
C.
D.
35.  Complete the missing figures from the accounts of Constance Curtains Ltd.
A. A
A.
B. B
B.
C. C
C.
D. D
D.
E. E
E.
36.  The three main business accounts are:  1. ____________ 2. Balance sheet       3. Cash-flow statement
37.  Which of the following is most likley to be a long-term business liability?
A.
B.
C.
D.
38.  _________________: The total value of sales made during the trading period = selling price x quantity sold
39.  LIFO stock valuation will tend to reduce the tax bill for business
A.
B.
40.  On a profit and loss account, dividends represent
A.
B.
C.
D.
41.  Which of the following is not considered a fixed asset?
A.
B.
C.
D.
42.  _____________  = sales revenue less cost of sales
43.  Net profit and operating profit are equal when there is an absence of which option below?
A.
B.
C.
D.
44.  Identify the key terms from the clues given
A. Opening stock PLUS purchases LESS closing stock
A.
B. Sales revenue LESS costs of goods sold
B.
C. Net profit LESS gross profit
C.
D. Net profit after tax and interest LESS dividends
D.
45.  Use the following information to work out the profit on ordinary activites before tax
A.
B.
C.
D.
46.  All fixed assets depreciate over a long period of time
A.
B.
47.  _______________: The share of profits paid to shareholders as a return for investing in a company
48.  Appreciation refers to an increase in the value of an asset over time
A.
B.
49.  In which account would overheads and expenses appear?
A.
B.
C.
D.
50.  Suppliers would be interested in the final accounts of a business in order to
A.
B.
C.
D.
51.  A firm could increase its gross profit by
A.
B.
C.
D.
52.  _____________: Total value of assets - total value of liabilities
53.  Where is revenue earned from holding shares in other companies that have paid out dividends recorded?
A.
B.
C.
D.
54.  Assume that equipment bought by a manufacturer costing $15 000 has a useful life of five years. Annual depreciation is charged at 40%. Calculate the book value of the asset after two years.
A.
B.
C.
D.
55.  Gross profit less expenses plus non-operating income gives
A.
B.
C.
D.
56.  Which of the following items is not found in a balance sheet?
A.
B.
C.
D.
57.  The three main business accounts are:  1. Income statement 2.  _______________     3. Cash-flow statement
58.  Which of the following equations is found in a balance sheet of a public limited company?
A.
B.
C.
D.
59.  Three sections of an income statement:  1. Trading account 2. Profit and loss account 3. __________ account
60.  If a firm buys a delivery vehicle with cash, how will this be reflected in the balance sheet?
A.
B.
C.
D.
61.  _______________: This is the direct cost of purchasing the goods that were sold during the financial year.
62.  Money owed to other people or organisations are shown in a balance sheet as
A.
B.
C.
D.
63.  De Melo Consultancy uses the declining balance method to depreciate its fixed assets. The firm purchases computers worth $300 000 and uses a depreciation rate of 30%. The computers are expected to last five years before being replaced. What is the net book value of the computers after two years?
A.
B.
C.
D.
64.  Expenses are the
A.
B.
C.
D.
65.  __________: Items of monetary value that are owned by the business
66.  Which of the following would be shown as an exceptional item on a profit and loss account?
A.
B.
C.
D.
67.  Which of the following is not an intangible asset?
A.
B.
C.
D.
68.  The appropriation account does not show
A.
B.
C.
D.
69.  Which item appears in the balance sheet of a sole trader? 
A.
B.
C.
D.
70.  The main purpose of constructing a balance sheet is to
A.
B.
C.
D.
71.  _______________: Tangible assets (e.g. not brands) that have a physical existence and are expected to be retained and used by a business for more than 12 months
72.  Hoopers Toys Ltd purchases goods at $10 000 and manages to sell these for $18 000. State the cost of goods sold
A.
B.
C.
D.
73.  In which final accounts would you find 'shareholders' funds'?
A.
B.
C.
D.
74.  Intangible assets include all the following except
A.
B.
C.
D.
75.  The reducing balance method of depreciation reduces the value of an asset by a fixed amount of the book value of the asset
A.
B.
76.  Identify the key terms from the clues given
A. Gross profit LESS expenses
A.
B. Net profit LESS gross profit
B.
C. Sales revenue LESS total costs of production
C.
D. Net profit after tax and interest LESS dividends
D.
77.  Ortega Clothing Company has expenses of $123 000 and a net profit of $321 000. Calculate the firm's gross profit
A.
B.
C.
D.
78.  Fixed assets include all the following except
A.
B.
C.
D.
79.     Refer to the information below and calculate the firm's net profit.
A.
B.
C.
D.
80.  Identify the key terms from the clues given
A. Opening stock PLUS purchases LESS closing stock
A.
B. Net profit after tax LESS retained profit
B.
C. Sales revenue LESS costs of goods sold
C.
D. Gross profit LESS expenses
D.
81.  Net assets is calculated by
A.
B.
C.
D.
82.  Hoopers Toys Ltd purchases goods at $10 000 and manages to sell these for $18 000. State the sales revenue
A.
B.
C.
D.
83.  _____________: An accounting statement that records the values of a business's assets, liabilities and shareholders' equity at one point in time
84.  Capital expenditure can be determined via a balance sheet
A.
B.
85.  Complete the missing figures from the accounts of Constance Curtains Ltd.
A. A
A.
B. B
B.
C. C
C.
D. E
D.
E. F
E.
86.  Physical assets tend to depreciate over time. Which assets below do not generally follow this trend?
A.
B.
C.
D.
87.  Assume that Pitarch Car Hire Co. bought a vehicle for $35 000 with an expected life of 4 years. Its residual value is estimated to be $7 000. Calculate the straight line depreciation per year.
A.
B.
C.
D.
88.  A patent
A.
B.
C.
D.
89.  Three sections of an income statement:  1. _______ account 2. Profit and loss account 3. Appropriation account
90.  Non-operating income does not include
A.
B.
C.
D.
91.  Calculate the cost of sales from the following information: Cost of stock per unit = $20. Units of stock purchases = 800. Closing Stock = 300 units and Opening Stock = 250 units.
A.
B.
C.
D.
92.  Which of the following would not be classifies as an expense in the profit and loss  account?
A.
B.
C.
D.
93.  Which statement about tangible assets is true?
A.
B.
C.
D.
94.  Publication of final accounts include all the following statements except
A.
B.
C.
D.
95.  Which statement below cannot be applied to gross profit?
A.
B.
C.
D.
96.  Three sections of an income statement:  1. Trading account 2.  ___________ account 3. Appropriation account
97.  The three main business accounts are:  1. Income statement 2.  _______________     3. Cash-flow statement
98.  The three main business accounts are:  1. Income statement 2. Balance sheet       3. ____________
99.  Cash flow forecasts are historical statements showing the movement of cash in a business over time
A.
B.
100.  Expenses do not include
A.
B.
C.
D.
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