Worksheets3.4 final accounts
Total questions: 19
Worksheet time: 14mins
Name
Class
Date
1.
One of these statements about the profit and loss account is correct - which one?
a)
It helps measure the success of a business
b)
It shows the assets and liabilities at a point in time.
c)
It measures the net cash flow of a business
d)
It provides evidence about a firm's liquidity.
2.
The formula of sales revenue less cost of goods sold enables you to calculate
a)
Net profit
b)
Operating profit
c)
Retained profit
d)
Gross profit
3.
Which of these actions might improve gross profit but increase overheads?
a)
Increase the shareholder dividend by 10%
b)
Increase advertising for a new product
c)
Negotiate better prices from a supplier
d)
Increase selling prices by 5%
4.
The trading account on a P&L shows
a)
How net profit is distributed
b)
The difference between a firm's sales revenue and direct costs of trading
c)
The amount of profit or loss made
d)
The expenses, interest and tax
5.
Which of these statements about retained profits is incorrect?
a)
Are very flexible in how they can be used
b)
Are free - they have no cost
c)
Do not dilute the ownership of a firm
d)
Are a key source of finance for a profitable firm
6.
Which of these might be a strategy to minimise cost?
a)
Adding more options to a product range
b)
Adding layers to the organisational heirarchy
c)
Increasing prices with suppliers
d)
Outsourcing non-core activities
7.
Which of these would normally lead to an imrprovement in a firm's liquidity position?
a)
Higher dividends
b)
Lower profitability
c)
Higher capital spending
d)
Improved working capital
8.
The process of a firm offering its shares for sale on the Stock Exchange for the fist time is known as a:
a)
Flotation
b)
Initial Public Offering
c)
Placing
d)
Rights issue
9.
A decision to cut shareholder dividends would lead to hgher …
a)
Share price
b)
Retained profit
c)
Operating proit
d)
Gearing
10.
Hooper Toys Ltd. Purchases goods at $10,000 and manages to sell thses for $18,000. State the Cost of Goods Sold (COGS)
a)
$8,000
b)
$10,000
c)
$18,000
d)
$28,000
11.
Hooper Toys Ltd. Purchases goods at $10,000 and manages to sell thses for $18,000. State the sales revenue
a)
$8,000
b)
$10,000
c)
$18,000
d)
$28,000
12.
Hooper Toys Ltd. Purchases goods at $10,000 and manages to sell thses for $18,000. State the gross profit
a)
$8,000
b)
$10,000
c)
$18,000
d)
$28,000
13.
If expenses are greater than gross profit or a business, then the business …
a)
has performed well
b)
has made an overall loss
c)
can distribute a share of the profit to the shareholders
d)
has a positive net profit balance
14.
In which account would you expect to see overheads and expenses?
a)
The Trading Account
b)
The balance sheet
c)
The appropriation account
d)
The profit and loss account
15.
What is depreciation?
a)
An estimate of the fall in value of a fixed asset over time
b)
A cash flow caused by buying foxed assets
c)
An increase in the value of a currency
d)
A cost arising when customers fail to pay their bills
16.
The key difference between current liabilities and long term liabilities is:
a)
Whether there is enough cash to pay them
b)
How large they are
c)
Whether they involve banks or not
d)
When they need to be settled
17.
The two main parts of the equity portion of the balance sheet are:
a)
Current assets and current liabilities
b)
Long term liabilities and shares
c)
Non-current assets and current assets
d)
Share capital and retained profits
18.
Which of these claims is FALSE about a balance sheet? A balance sheet …
a)
Explains how the firm's capital has been invested
b)
Shows the assets and liabilities of the firm
c)
Indicates the strength of the firm's profit margin
d)
Is drawn up at a specific point in time
19.
Which of these items would be included as goodwill (intangible assets)?
a)
The reputation of the firm for good quality
b)
The value of employee skill and experience
c)
Plant and machinery bought in an acquisition
d)
The cost of a purchased brand
100 %
