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Worksheets

use of financial documents

Total questions: 48

Worksheet time: 29mins

Name
Class
Date
1.
Financial ratios that tell how well a company can pay off its short-term debts and meet unexpected needs for cash.
a)
liquidity ratios
b)
efficiency ratios
c)
leverage ratios
d)
profitability ratios
2.
The difference between current assets and current liabilities at a point in time. The amount of money that would be left over if all the current liabilities were paid off by current assets. 
a)
current ratio
b)
working capital
c)
acid test/ quick ratio
d)
asset turnover ratio
3.
The comparison of a firm's current assets to current liabilities. The ratio indicates the amount of current assets available to pay off $1 of current debt.
a)
acid test/ quick ratio
b)
asset turnover ratio
c)
current ratio
d)
inventory turnover
4.
Indicates a firm's ability to quickly liquidate assets to pay off current debts.
a)
asset turnover ratio
b)
inventory turnover
c)
debt-to-assets ratio
d)
acid test/ quick ratio
5.
The amount of profit generated by the firm in relation to the amount invested by the owners.
a)
return on investment
b)
ratio
c)
working capital
d)
inventory turnover
6.

These people look at ratios to monitor business operations

a)

Ratio

b)

Managers

c)

Profit

d)

Competitive Analysis

7.

An element of the income statement that informs the business of just how much money it is making

a)

Net income

b)

Creditors

c)

Revenue

d)

Income Statement

8.

Another name for the income statement because it is used to make a variety of business decisions

a)

Operating Statement

b)

Profit and Loss Statement

c)

Sales Growth Ratio

d)

Revenue

9.

Any money made from the sale of the business’s goods and services

a)

Creditors

b)

Categories

c)

Managers

d)

Revenue

10.

Total profit made before all remaining expenses have been deducted

a)

Financial Ratios

b)

Gross Profit

c)

Net income

d)

Operating Statement

11.

This element of the income statement includes all direct costs to obtain and produce the goods or services that a business sells

a)

Operating Statement , Gross Profit

b)

Income Minus Expenses, Ratio

c)

Profit and Loss Statement

d)

Cost of Goods Sold

12.

These people use information from the income statement to determine if the business gets a loan

a)

Managers

b)

Stockholders

c)

Investors

d)

Creditors

13.

Gross profit is calculated by...

a)

Revenue - Total Costs

b)

Revenue + Variable Costs

c)

Revenue - Cost of Sales

d)

Revenue - Fixed Costs

14.

Cost of sales is calculated by...

a)

Opening stock + purchases - closing stock

b)

Opening stock + purchases + closing stock

c)

Adding up all of the stock bought during the year

d)

Opening stock - closing stock

15.

How do you calculate net profit?

a)

Gross profit - expenses

b)

Revenue - total costs

c)

Gross profit - variable costs

d)

Revenue - indirect costs

16.
Examples may include salaries, utilities, rent, insurance, and office supplies.
a)
Revenue
b)
Expense
c)
Net Income
d)
Net Loss
17.

Revenue = 1000

Cost of Goods Sold = 200

Expenses = 300

Gross Profit = ?

a)

800

b)

500

c)

700

d)

300

18.

Revenue = 1000

Cost of Goods Sold = 200

Expenses = 300

Net Profit = ?

a)

800

b)

500

c)

700

d)

300

19.

Net Profit = 500

Revenue = 2000

Expenses = 1000

Cost of Goods Sold = ?

a)

1500

b)

1000

c)

3000

d)

500

20.

The financial statement that reports net income or net loss

a)

Income Statement

b)

Balance Sheet

c)

Statement of Cash Flows

d)

Statement of Changes in Owner's Equity

21.

Which Financial Statement identifies company's financial position?

a)

Income Statement

b)

Statement of Changes in Owner's Equity

c)

Statement of Cash Flows

d)

Balance Sheet

22.

An expense is..

a)

money Owed to the Business

b)

money a business spends on the general operation of business

c)

money the business owes to other organizations and people

d)

None of the above

23.

Current Assets / Current liabilities = which ratio?

a)

Current Ratio

b)

Quick Ratio

c)

Profitability Ratio

d)

Return on sales

24.

What does liquidity mean?

a)

Any type of asset, including water

b)

if it can easily be converted to expenses

c)

how easy the asset can be converted to cash

d)

how easy the liability can be converted to cash

25.

What is not included on the statement of changes in owner's equity?

a)

Capital

b)

Expenses

c)

Withdrawals

d)

Net income

26.

Current Assets include:

a)

Property

b)

Buildings

c)

Cash

d)

Accounts payable

27.
Managers and owners use these to make their business decisions
a)
Financial Statements
b)
General Ledger
28.
The difference between total revenue and total expenses is called
a)
Total Assets
b)
Net Income or Net Loss
c)
Owner's Capital
29.
If total expenses exceed total revenue, a net loss is reported
a)
True
b)
False
30.
Which one is not an expense?
a)
raw materials
b)
production costs
c)
commission received
d)
insurance
31.
what is the purpose of an income statement?
a)
calculate the bank balance
b)
calculate net assets
c)
calculate sales
d)
calculate net profit
32.
How do you calculate gross profit?
a)
Sales - COGS
b)
Sales - NP
c)
COGS - Expenses
d)
COGS - NP
33.
Which type of business ownership gives dividends?
a)
sole trader
b)
partnership
c)
company
34.

These are used by investors, market analysts, and creditors to evaluate a company's financial health and earnings.

a)

Statement of Financial Position

b)

Financial Statements

c)

Balance Sheet

d)

Cash flows

35.

Also called as Balance Sheet.

a)

Statement of Financial Position

b)

Financial Statements

c)

Statement of Balance

d)

Statement of Income

36.

This is what the business owns.

a)

Assets

b)

Liablities

c)

Loans

d)

Owner's Equity

37.

This is what the business owes.

a)

Assets

b)

Liabilities

c)

Loans

d)

Owner's Equity

38.

Also known as the "Long-term Assets"

a)

Non-current Assets

b)

Current Assets

c)

Non-current liabilities

d)

Current Liabilities

39.

Refers to the financial obligations of a company that are not expected to be settled within one year.

a)

Non-current Assets

b)

Current Assets

c)

Non-Current Liabilities

d)

Current Liabilities

40.

This is an example of

a)

Report Form Balance Sheet

b)

Account Form Balance Sheet

41.

Following are accounts under _________________.

•Cash and cash equivalents

•Trade and other receivables

•Inventories

•Biological assets

•Investments

•Financial assets

•Investment property

•Property, plant, and equipment

a)

Assets

b)

Liabilities

c)

Owner's Equity

42.

These are the resources owned by the company that can provide future economic benefits.

a)

Assets

b)

Liabilities

c)

Owner's Equity

43.

Another name for the statement of Financial Position.

a)

Balance Sheet

b)

Income Statement

c)

Pofit and Loss Statement

44.

Cash in Bank is classified as

a)

Current Asset

b)

Current Liability

c)

Noncurrent Asset

d)

Noncurrent Liability

45.

Account Receivable is classified as

a)

Current Asset

b)

Current Liability

c)

Noncurrent Asset

d)

Noncurrent Liability

46.

Furniture and Fixtures is classified as

a)

Current Asset

b)

Current Liability

c)

Noncurrent Asset

d)

Noncurrent Liability

47.

Current liabilities are short-term debts. The money owed must be paid back within one year.

a)

True

b)

False

48.

Current assets can be turned into cash within ...

a)

two years

b)

three years

c)

a year