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Ib Business And Management Accounts & Finance: 3.5 Financial Accounts

100 Questions  I  By BusinessIB1
IB Business and Management ACCOUNTS & FINANCE: 3.5 Financial Accounts
 

  
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1.  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.
2.  _____________  = sales revenue less cost of sales
3.  The main benefit to a firm using the LIFO, rather than the FIFO, method of stock control is that
A.
B.
C.
D.
4.  The main purpose of constructing a balance sheet is to
A.
B.
C.
D.
5.  Which item appears in the balance sheet of a sole trader? 
A.
B.
C.
D.
6.  Current assets do not include
A.
B.
C.
D.
7.  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.
8.  On a profit and loss account, dividends represent
A.
B.
C.
D.
9.  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.
10.  Capital expenditure can be determined via a balance sheet
A.
B.
11.  Three sections of an income statement:  1. Trading account 2. Profit and loss account 3. __________ account
12.  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.
13.  Fixed assets include all the following except
A.
B.
C.
D.
14.  Net assets refers to the difference between a firm's total assets and its current liabilities
A.
B.
15.  Historic cost is the original price that a firm paid for the purchase of a fixed asset
A.
B.
16.     Refer to the information below and calculate the firm's net profit.
A.
B.
C.
D.
17.  Appreciation refers to an increase in the value of an asset over time
A.
B.
18.  LIFO stock valuation will tend to reduce the tax bill for business
A.
B.
19.  Suppliers would be interested in the final accounts of a business in order to
A.
B.
C.
D.
20.  An increase in the value of certain fixed assets, sucha s land and buildings, is known as
A.
B.
C.
D.
21.  Intangible assets are
A.
B.
C.
D.
22.  Which statement cannot be applied to goodwill?
A.
B.
C.
D.
23.  The three main business accounts are:  1. Income statement 2. Balance sheet       3. ____________
24.  Physical assets tend to depreciate over time. Which assets below do not generally follow this trend?
A.
B.
C.
D.
25.  Hoopers Toys Ltd purchases goods at $10 000 and manages to sell these for $18 000. State the sales revenue
A.
B.
C.
D.
26.  _____________: An accounting statement that records the values of a business's assets, liabilities and shareholders' equity at one point in time
27.  The three main business accounts are:  1. Income statement 2.  _______________     3. Cash-flow statement
28.  Which of the following would not be classifies as an expense in the profit and loss  account?
A.
B.
C.
D.
29.  The Trading Account gives details of
A.
B.
C.
D.
30.  If a firm buys a delivery vehicle with cash, how will this be reflected in the balance sheet?
A.
B.
C.
D.
31.  The three main business accounts are:  1. ____________ 2. Balance sheet       3. Cash-flow statement
32.  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.
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.  The appropriation account does not show
A.
B.
C.
D.
35.  Motor vehicles tend to depreciate most in value at the beginning of their useful life
A.
B.
36.  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.
37.  Which of the following equations is found in a balance sheet of a public limited company?
A.
B.
C.
D.
38.  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.
39.  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.
40.  _______________: 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
41.  Bank overdrafts and creditors are examples of current liabilities
A.
B.
42.  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.
43.  _____________: Total value of assets - total value of liabilities
44.  The three main business accounts are:  1. Income statement 2.  _______________     3. Cash-flow statement
45.  The profit figure shown in a profit and loss account is an accurate estimate which may be revised at a later date
A.
B.
46.  In which final accounts would you find 'shareholders' funds'?
A.
B.
C.
D.
47.  Sole traders and partnerships are not required by law to publish their final accounts publicly.
A.
B.
48.     Refer to the information below and calculate the firm's total dividend payout to shareholders.
A.
B.
C.
D.
49.     Refer to the information below and calculate the firm's gross profit.
A.
B.
C.
D.
50.  Which of the following items does not appear in a profit and loss account?
A.
B.
C.
D.
51.  Net assets is calculated by
A.
B.
C.
D.
52.  __________: Items of monetary value that are owned by the business
53.  Money owed to other people or organisations are shown in a balance sheet as
A.
B.
C.
D.
54.  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.
55.  It is not a legal requirement for all companies to show their shareholders the sources and use of finances
A.
B.
56.  Intangible assets include all the following except
A.
B.
C.
D.
57.  Cash flow forecasts are historical statements showing the movement of cash in a business over time
A.
B.
58.  A firm could increase its gross profit by
A.
B.
C.
D.
59.  If expenses are greater than gross profit for a business, then the business
A.
B.
C.
D.
60.  All fixed assets depreciate over a long period of time
A.
B.
61.  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.
62.  Hoopers Toys Ltd purchases goods at $10 000 and manages to sell these for $18 000. State the gross profit
A.
B.
C.
D.
63.  _______________: The share of profits paid to shareholders as a return for investing in a company
64.  _____________: 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
65.  A patent
A.
B.
C.
D.
66.  Three sections of an income statement:  1. Trading account 2.  ___________ account 3. Appropriation account
67.  Which of the following is a business not legally obliged to report?
A.
B.
C.
D.
68.  Gross profit less expenses plus non-operating income gives
A.
B.
C.
D.
69.   _______________: The profit left after all deductions, including dividends, have been made. This is 'ploughed back' into the company as a source of finance
70.  Which of the following is not considered a fixed asset?
A.
B.
C.
D.
71.  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.
72.  The profit and loss account
A.
B.
C.
D.
73.  Use the following information to work out the profit on ordinary activites before tax
A.
B.
C.
D.
74.  Which of the following is most likley to be a long-term business liability?
A.
B.
C.
D.
75.  Expenses do not include
A.
B.
C.
D.
76.  Work out the value of net current assets from the information given
A.
B.
C.
D.
77.  Which of the following would be shown as an exceptional item on a profit and loss account?
A.
B.
C.
D.
78.  _________________: The total value of sales made during the trading period = selling price x quantity sold
79.  Which of the following statements does not usually apply to fixed assets?
A.
B.
C.
D.
80.  Non-operating income does not include
A.
B.
C.
D.
81.  Which of the following is not an intangible asset?
A.
B.
C.
D.
82.  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.
83.  _____________: A financial obligation of a business that it is required to repay in the future
84.  Three sections of an income statement:  1. _______ account 2. Profit and loss account 3. Appropriation account
85.  Which statement below cannot be applied to gross profit?
A.
B.
C.
D.
86.  Current assets do not include
A.
B.
C.
D.
87.  ___________ = gross profit - overhead expenses
88.  _______________: This is the direct cost of purchasing the goods that were sold during the financial year.
89.  Which of the following items is not found in a balance sheet?
A.
B.
C.
D.
90.  Capital employed does not include the calculation of
A.
B.
C.
D.
91.  Publication of final accounts include all the following statements except
A.
B.
C.
D.
92.  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.
93.  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.
94.  In which account would overheads and expenses appear?
A.
B.
C.
D.
95.  Where is revenue earned from holding shares in other companies that have paid out dividends recorded?
A.
B.
C.
D.
96.  Net profit and operating profit are equal when there is an absence of which option below?
A.
B.
C.
D.
97.  Which statement about tangible assets is true?
A.
B.
C.
D.
98.  Work out the value of net profit from the following information
A.
B.
C.
D.
99.  Interest payable means
A.
B.
C.
D.
100.  Expenses are the
A.
B.
C.
D.
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