Formative Quiz - Financial and Management Accounting

A _____________ reflects the company’s position by showing what the company owes and what it owns.

• Income Statement

• Cash flow forecast

• Balance Sheet

• P/L Account

________________ is an asset that is not physical in nature.

• Tangible Assets

• Intangible Assets

This refers to an accounting method used to allocate the cost of a tangible or physical asset over its useful life.

• Depreciation

• Amortisation

_________________ is an indicator of a company’s short-term liquidity position and measures a company’s ability to meet its short-term obligations with its most liquid assets.

• Current Ratio

• Quick Ratio

• Debt Ratio

• Gearing Ratio

The following is the formula to calculate Gross Profit

• Revenue - Cost of Sales

• Revenue - All Expenses

• Revenue + Cost of Sales

• Expenses + Cost of Sales

An accounting term for a company that has the resources needed to continue operating indefinitely until it provides evidence to the contrary

• Liquidity

• Assets

• Liabilities

• Going Concern

What is the formula for cost of sales?

• Opening Stock - Purchases + Closing Stock

• Opening Stock + Purchases + Closing Stock

• Opening Stock + Purchases - Closing Stock

• Opening Stock - Purchases - Closing Stock

It is a method, which measures how quickly (or slowly) a project will repay the initial capital investment.

• Capital Investment Appraisal

• Net Present Value

• Payback Method

• Average Rate of Return

Marginal costing theory assumes that every cost can be placed in one of the two categories - _______ costs or _______ costs.

• Direct, Indirect

• Fixed, Variable

• Direct, Variable

• Fixed, Indirect

An individual or organisation to whom money or service is owed by the company.

• Creditor

• Debtor

• Shareholder

• Purchaser