Financial Vocabulary Knowledge Test: Quiz
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Accounts Receivable
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Current Asset
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Negative Income
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Negative Asset
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Non-Current Liability
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Non Current Asset
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Negative Equity
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Income
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Equity
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Current Liability
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Expense
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Financial vocabulary knowledge test: quiz. One of the things you learn during the first finance classes is what different words mean. If you are a new student and are looking to test out some of the new vocubalary this quiz is for you. Do give it a shot and get to refresh your memory on some of the most used See morewords. All the best and keep a look out for quizzes just like it!
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- 2.
Accounts Payable
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Current Asset
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Negative Income
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Negative Asset
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Non-Current Liability
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Non Current Asset
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Negative Equity
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Income
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Equity
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Current Liability
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Expense
Correct Answer
A. Current LiabilityExplanation
Current Liability refers to the debts or obligations that a company is expected to pay off within a year or within its normal operating cycle. This category includes short-term loans, accounts payable, accrued expenses, and other similar obligations. Current liabilities are important because they represent the company's short-term financial obligations and can impact its liquidity and ability to meet its current obligations. As a result, they are classified as liabilities on the balance sheet.Rate this question:
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- 3.
Goodwill
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Current Asset
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Negative Income
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Negative Asset
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Non-Current Liability
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Non Current Asset - > Intangible Asset
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Negative Equity
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Income
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Equity
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Current Liability
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Expense
Correct Answer
A. Non Current Asset - > Intangible AssetExplanation
Goodwill is an intangible asset that represents the value of a company's reputation, brand, customer relationships, and other non-physical assets. It is classified as a non-current asset because it is not expected to be converted into cash within one year.Rate this question:
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- 4.
Capital
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Current Asset
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Negative Income
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Negative Asset
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Non-Current Liability
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Non Current Asset - > Intangible Asset
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Negative Equity
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Income
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Equity
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Current Liability
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Expense
Correct Answer
A. EquityExplanation
Equity refers to the ownership interest in a company, representing the residual interest in the assets of the company after deducting liabilities. It is the value of the shareholders' stake in a business. Equity can increase through the issuance of new shares or through retained earnings. It represents the net worth of a company and is an important component of the company's financial structure.Rate this question:
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- 5.
Profit for the Year
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Current Asset
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Negative Income
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Negative Asset
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Non-Current Liability
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Non Current Asset - > Intangible Asset
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Negative Equity
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Income
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Equity
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Current Liability
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Expense
Correct Answer
A. EquityExplanation
Equity represents the ownership interest in a company. It is calculated by subtracting liabilities from assets and is also known as shareholders' equity or net assets. Equity reflects the residual interest in the assets of the company after deducting its liabilities. It represents the amount that would be left for shareholders if all the company's assets were sold and all its debts were paid off. Therefore, the correct answer in this case is "Equity".Rate this question:
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- 6.
Inventory
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Current Asset
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Negative Income
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Negative Asset
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Non-Current Liability
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Non Current Asset - > Intangible Asset
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Negative Equity
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Income
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Equity
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Current Liability
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Expense
Correct Answer
A. Current AssetExplanation
A current asset refers to any asset that is expected to be converted into cash or used up within one year or the operating cycle of a business. It includes cash, accounts receivable, inventory, and prepaid expenses. In this case, "Inventory" is the correct answer because it is a type of current asset that represents goods or products held by a company for sale or production.Rate this question:
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- 7.
Bank Overdraft
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Current Asset
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Negative Income
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Negative Asset
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Non-Current Liability
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Non Current Asset - > Intangible Asset
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Negative Equity
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Income
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Equity
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Current Liability
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Expense
Correct Answer
A. Current LiabilityExplanation
The answer is Current Liability because a bank overdraft represents a negative balance in a bank account, indicating that the company owes money to the bank. This debt is typically due within a year, making it a current liability.Rate this question:
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- 8.
Accrued Income
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Current Asset
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Negative Income
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Negative Asset
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Non-Current Liability
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Non Current Asset - > Intangible Asset
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Negative Equity
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Income
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Equity
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Current Liability
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Expense
Correct Answer
A. Current AssetExplanation
The correct answer is Current Asset. Accrued income refers to income that has been earned but not yet received, and it is considered a current asset because it is expected to be received in the near future. Current assets are those that are expected to be converted into cash or used up within one year or the operating cycle of a business. Examples of current assets include cash, accounts receivable, inventory, and prepaid expenses.Rate this question:
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- 9.
Accrued Expense
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Current Asset
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Negative Income
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Negative Asset
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Non-Current Liability
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Non Current Asset - > Intangible Asset
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Negative Equity
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Income
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Equity
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Current Liability
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Expense
Correct Answer
A. Current LiabilityExplanation
A current liability refers to a debt or obligation that a company is expected to settle within one year or its normal operating cycle, whichever is longer. It is classified as a current liability because it is expected to be paid off in the near future. This can include items such as accounts payable, short-term loans, and accrued expenses. Therefore, the answer "Current Liability" is the correct classification for the term "Accrued Expense" as it represents a liability that is expected to be settled within the next year.Rate this question:
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- 10.
Shares in BroSir LTD
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Current Asset
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Negative Income
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Negative Asset
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Non-Current Liability
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Non Current Asset - > Investments
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Negative Equity
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Income
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Equity
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Current Liability
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Expense
Correct Answer
A. Non Current Asset - > InvestmentsExplanation
The correct answer is "Non Current Asset - > Investments" because shares in BroSir LTD are considered as investments and are classified as a non-current asset. Non-current assets are long-term assets that are not intended to be converted into cash within one year. Investments in shares are typically held for a longer period of time and are not expected to be sold or converted into cash in the short term.Rate this question:
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- 11.
Loan (12% per annum due 15/03/2040)
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Current Asset
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Negative Income
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Negative Asset
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Non-Current Liability
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Non Current Asset - > Investments
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Negative Equity
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Income
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Equity
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Current Liability
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Expense
Correct Answer
A. Non-Current LiabilityExplanation
The loan with a due date in the future (15/03/2040) suggests that it is a long-term liability rather than a current liability. Non-current liabilities are obligations that are not expected to be settled within the next year. Therefore, the loan is classified as a non-current liability.Rate this question:
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- 12.
Drawings
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Current Asset
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Negative Income
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Negative Asset
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Non-Current Liability
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Non Current Asset - > Investments
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Negative Equity
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Income
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Equity
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Current Liability
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Expense
Correct Answer
A. Negative EquityExplanation
Negative equity occurs when the liabilities of a company exceed its assets. This means that the company owes more than it owns, resulting in a negative net worth. Negative equity can arise due to various reasons such as accumulated losses, high debt levels, or a decline in the value of assets. It is a concerning situation for a company as it indicates financial instability and potential difficulties in meeting its obligations.Rate this question:
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- 13.
Allowance for Doubtful Debts
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Current Asset
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Negative Income
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Negative Asset
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Non-Current Liability
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Non Current Asset - > Investments
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Negative Equity
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Income
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Equity
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Current Liability
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Expense
Correct Answer
A. Negative AssetExplanation
The correct answer is "Negative Asset" because an allowance for doubtful debts represents a reduction in the value of accounts receivable that are expected to be uncollectible. This reduction is recorded as a contra-asset account, which means it has a negative balance. Therefore, it is classified as a negative asset on the balance sheet.Rate this question:
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- 14.
GST
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Current Asset
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Negative Income
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Negative Asset
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Non-Current Liability
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Non Current Asset - > Investments
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Negative Equity
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Income
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Equity
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Current Liability
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Expense
Correct Answer
A. Current LiabilityExplanation
The correct answer is Current Liability. A current liability refers to a debt or obligation that is expected to be settled within one year or the operating cycle of a business. In the context of GST (Goods and Services Tax), it is a liability that a business owes to the government for collecting taxes from customers and is required to be paid within a specified time frame. As GST is a tax liability that needs to be settled in the short term, it falls under the category of current liabilities.Rate this question:
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- 15.
Total Carrying Amount
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Current Asset
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Negative Income
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Negative Asset
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Non-Current Liability
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Non Current Asset - > Property, Plant and Equipment
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Negative Equity
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Income
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Equity
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Current Liability
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Expense
Correct Answer
A. Non Current Asset - > Property, Plant and EquipmentExplanation
The correct answer is "Non Current Asset - > Property, Plant and Equipment." This answer is correct because Property, Plant, and Equipment are long-term assets that are not easily converted into cash. They are tangible assets that are used in the production or supply of goods and services, rather than being held for sale. These assets are expected to provide economic benefits to the company for more than one accounting period.Rate this question:
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Current Version
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Mar 20, 2023Quiz Edited by
ProProfs Editorial Team -
Sep 20, 2011Quiz Created by
BroSir
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