Quiz#1 in FABM2

Which of the following is a social purpose of taxation?

• Encouraging tax evasion

• Discouraging charitable donations

• Redistributing wealth

• Increasing consumer spending

What is the primary purpose of taxation?

• To encourage savings

• To promote inflation     

• To generate revenue for the government

• To control market competition

What is a tax deduction?

• Money paid to the government

• A type of tax credit

• An amount subtracted from taxable income

• A tax evasion technique

What is the term for the portion of an individual's income that is not subject to taxation?

• Taxable income

• Gross income

• Tax exclusion

• Tax credit

What is an example of a tax deduction that individuals might commonly claim?

• Child tax credit

• Interest earned on savings account

• Social Security benefits

• Payroll taxes

What adjustment is typically made on the company's books during bank reconciliation to account for bank service charges?

• Increase in cash

• Increase in accounts payable

• Decrease in cash

• Decrease in accounts receivable

Horizontal analysis of financial statements is also known as

• Common-Size Analysis

• Trend Analysis

• Ratio Analysis

• Cross-Sectional Analysis

Which measurement level focuses on a company's ability to meet its short-term obligations using its current assets?

•  Solvency

• Profitability

• Liquidity

• Stability

Which of the following sections in a Cash Flow Statement typically includes the cash effects of a company's core operating activities?

• Financing Activities

• Investing Activities

• Operating Activities

• Non-Operating Activities

The Debt-to-Equity Ratio is calculated by dividing:

• Total Liabilities by Total Equity

• Net Profit by Total Assets

• Current Assets by Current Liabilities

• Gross Profit by Net Sales