1st Quiz FA

The difference between sales and COGS is called as:

• Gross profit

• Operating profit

• Net profit

• Sales profit

The profit margin before deducting interest expenses and taxes is called:

• Gross profit margin

• Operating profit margin

• Net profit margin

• Sales profit margin

The profit available for the distribution to shareholders is called as:

• Gross profit

• Operating profit

• Net profit

• Sales profit

To evaluate the financial health of the business the profit margins should be compared with:

• Same industry average

• Market average

• Other industries average

• Historical market average

The formula to calculate return on equity is:

• Net Income/Total Capital

• Net Income/ Total retained earnings.

• Net Income/ Total shareholders’ equity

• Net Income/ Total investment

Which concept of accounting says, “record expenses, losses, and liabilities as soon as possible when there is uncertainty about the outcome and gains and incomes should be recorded only if their occurrence is certain.”

• Conservatism concept or the prudence concept

• Accrual concept

• Matching concept

• Materialism concept

Operating profit can also be called as:

• Earnings before interest and tax

• Earnings before tax

• Earnings after tax

• Earnings after interest and tax

The recording of which of the following expense cannot be impacted by the managers discretion?

• Advertisement Expenses

• Incorporation Expenses

• Rent Expenses

• Depreciation expenses

Which of the following is current assets?

• Prepaid expenses

• Outstanding expenses

• Unearned revenue

• Advance revenue

Which of the statements shows the financial position of the business?

• Profit and loss statement

• Balance Sheet

• Cash flow statement

• Statement of retained earnings