Free Printable First Exam Financial Management

1.

Customers

a)

Internal User

b)

External User

2.

Labor Unions

a)

Internal User

b)

External User

3.

Marketing manager

a)

Internal User

b)

External User

4.

Securities and Exchange Commission (SEC)

a)

Internal User

b)

External User

5.

Store manager

a)

Internal User

b)

External User

6.

Suppliers

a)

Internal User

b)

External User

7.

Vice president of finance

a)

Internal User

b)

External User

8.

Did the company earn a satisfactory income?

a)

Creditors

b)

Finance

c)

Management

d)

Investors

9.

Do we need to borrow in the near future?

a)

Creditors

b)

Finance

c)

Management

d)

Investors

10.

How does the company’s profitability compare to other companies?

a)

Creditors

b)

Finance

c)

Management

d)

Investors

11.

Will the company be able to pay its short-term debts?

a)

Customers

b)

Finance

c)

Creditors

d)

Marketing

12.

Which of the following is the definition for sole proprietorship

a)

business investment that involves renting or leasing another successful business model

b)

unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm; most common form of business organization in the United States

c)

unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm

d)

form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property, enter into legal contracts, and to sue and be sued

13.

Which of the following is the definition for Franchise

a)

business investment that involves renting or leasing another successful business model

b)

unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm; most common form of business organization in the United States

c)

unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm

d)

form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property, enter into legal contracts, and to sue and be sued

14.

Which of the following is the definition for Corporation?

a)

business investment that involves renting or leasing another successful business model

b)

unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm; most common form of business organization in the United States

c)

unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm

d)

form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property, enter into legal contracts, and to sue and be sued

15.

Which of the following is the definition for Partnership?

a)

business investment that involves renting or leasing another successful business model

b)

unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm; most common form of business organization in the United States

c)

unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm

d)

form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property, enter into legal contracts, and to sue and be sued

16.

Which of the following is an advantage of a sole proprietorship

a)

easy to start up

b)

Decisions do not require the approval of a co-owner, boss, or other "higher-up

c)

the owner can keep the profits of successful management without having to share them with other owners.

d)

All the other options

17.

Which of the following is a disadvantage of a sole proprietorship?

a)

it is easy to start

b)

he owner is personally and fully responsible for all losses and debts of the business. If the business fails, the owner’s personal possessions may be taken away to satisfy business debts.

c)

requires a partner

d)

it is easy to raise the financial capital to start

18.

Which of the following is an advantage of a partnership?

a)

they are hard to start

b)

management is hard between two or more people

c)

partnerships can usually attract financial capital more easily than proprietorships.

d)

They are inefficient.

19.

Which of the following is a disadvantage of a partnership?

a)

If one partner causes the firm to suffer a huge loss, each partner is fully and personally responsible for the loss.

b)

When a partner dies or leaves, the partnership must be dissolved and reorganized as a new partnership if the remaining partners want to stay in business.

c)

the potential for conflict between partners.

d)

all the options are disadvantages

20.

Which of the following is a disadvantage of a corporation?

a)

it is easy to raise financial capital using stocks, bonds, or loans.

b)

the double taxation of corporate profits. Profits are taxed the first time when the corporation pays income taxes. The profits are taxed a second time when shareholders pay taxes on their dividends.

c)

it is easy to get a charter to start a corporation.

d)

Owners and shareholders have total control over what happens with the business.

21.

Which of the following is an advantage of a corporation?

a)

all other answers are advantages.

b)

the corporation provides limited liability for its owners. This means that the corporation itself, not its owners, is fully responsible for its obligations.

c)

the corporation's board of directors can hire professional managers to run the firm. This means that the corporation's owners, its stockholders, can own a portion of the corporation without having to know much about the business itself.

d)

unlimited life, meaning that the corporation continues to exist even when shareholders sell their ownership shares of stock to someone else. Because the corporation is recognized as a separate legal entity, the name of the company stays the same, and the corporation continues to do business.

22.

Which of the following is an advantage of a Franchise?

a)

a nationwide network that had a respected product, a deep product line, excellent quality standards, nationwide advertising, and professional advice whenever needed.

b)

the ease of raising financial capital through stocks, bonds, and loans.

c)

the ease of management between two or more partners.

d)

the limited liability protection of a person's assets if the company fails.

23.

Which of the following is a disadvantage of a Franchise?

a)

the expense of purchasing the rights to a franchise can be high.

b)

the cost to terminate a franchise before its term is high.

c)

not owning the company, just the franchise.

d)

all other options are disadvantages.

24.

This type of business is owned by one person.

a)

Partnership

b)

Sole Proprietorship

c)

Corporation

d)

Franchise

25.

Disadvantages for this type of business include: owner pays for everything, hard to get money to start from the bank, owner might lack skills & unlimited liability.

a)

Sole Proprietorship

b)

Partnership

c)

Corporation

d)

Franchise

26.

A partnership in which all partners assume full personal liability for debts of the firm

a)

limited partnership

b)

trading partnership

c)

non-trading partnership

d)

general partnership

27.

Partners who are only responsible up to the extent of their investment

a)

limited partnership

b)

trading partnership

c)

non-trading partnership

d)

special partnership

28.

What is a major advantage of a business that is a partnership rather than a sole proprietorship?

a)

The responsibility for the business is shared

b)

The business is easy to set up

c)

The partners are not responsible for business debts

d)

The business is easy to sell

29.

Which of the following is a disadvantage of corporations:

a)

High taxes

b)

Unlimited life

c)

Unlimited liability

d)

financial power

30.

The owners of a corporation are called

a)

Directors

b)

Partners

c)

Shareholders

d)

Founders

31.

Most expensive to start

a)

Sole Proprietorship

b)

Partnership

c)

Corporation

32.

Ownership represented by stock

a)

Sole Proprietorship

b)

Partnership

c)

Corporation

33.

The main source of revenue for a trading business

a)

Sales

b)

Dividends

c)

Fees received

d)

Capital

34.

Stock at the beginning of the year

a)

Opening Inventory

b)

Sales

c)

Purchases

d)

Drawings

35.

Goods purchased during the year

a)

Sales

b)

Inventory

c)

Purchases

36.

Goods returned to suppliers that decrease Cost of goods sold

a)

Sales returns

b)

Credit purchases

c)

Purchase returns

37.

Expense on transportation of goods sold

a)

Freight inwards

b)

Administrative cost

c)

Freight outwards

38.

Which information is not included in the work sheet heading?

a)

The period covered

b)

Name of the accounting form

c)

Business name

d)

Accountant's name

39.

Asset, liability and equity accounts are extended to

a)

balance sheet section

b)

income statement section

c)

retained earnings

d)

trial balance

40.

Revenue and expense accounts are extended to

a)

retained earning statement

b)

balance sheet section

c)

income statement

d)

accounts payable section

41.

How does net loss affect owner's equity?

a)

increases

b)

decreases

c)

no change

d)

indirectly

42.

Transferring Information from the general journal to the ledger accounts is known as________?

a)

posting

b)

copying

c)

extending

d)

calculating

43.

When revenue > expenses, then there is a

a)

Net Loss

b)

mistake in the math

c)

Net Income

d)

transposition error

44.

A double ruled line under a balance means

a)

My pencil is broken

b)

There is no more to be done on this balance

c)

adding and subtracting is needed

d)

accounts payable

45.

Drawings are deducted from: (Year 2015/16)

a)

Sales

b)

Income

c)

Capital

d)

Expenses

46.

A prepaid expense is: (Year 2015)

a)

An asset

b)

A liability

c)

An expense

d)

An income

47.

Balance sheet showes

a)

Profit and loss

b)

Financial position

c)

Errors of accounts

d)

Total debtors

48.

Choose the current assets from following

a)

Cash

b)

Stock

c)

Debtors

d)

All of these

49.

Which task would be carried out by a book-keeper?

a)

comparison of financial statements of one year with another

b)

preparation of financial statements

c)

provision of information for decision-making

d)

recording financial transactions

50.

Which item does not appear in the financial statements of a service business?

a)

gross profit

b)

non-current assets

c)

non-current liabilities

d)

profit for the year

51.

Which item is an intangible non-current asset?

a)

balance at bank

b)

goodwill

c)

premises

d)

trade receivables

52.

Which is a service business?

a)

a business which sells computers and printers

b)

a business which trains computer operators

c)

a stationery supplier

d)

a TV and video supplier

53.

How should the owner of a business use his annual financial statements?

a)

to calculate the cash drawings for the year

b)

to determine the amount due to trade payables

c)

to measure the change in the bank balance

d)

to monitor the progress of the business

54.

A complete set of

financial statements includes the following components, except

a)

Statement of financial position, statement

of comprehensive income and statement of cash flows.

b)

Statement of changes in equity

c)

Notes, comprising a summary of significant

accounting policies and other explanatory information

d)

Reports and statements such as environmental

reports and value added statements.

55.

What is the objective of financial statements?

a)

To provide information about the financial position, financial performance and changes in financial position of an entity that is useful to a wide range of users in making economic decisions.

b)

To prepare and present a statement of financial position, statement of comprehensive income, statement of cash flows and statement of changes in equity.

c)

To prepare and present relevant, reliable, comparable and understandable information to investors and creditors.

d)

To prepare and present financial statements in accordance with all applicable PFRS and Interpretations.

56.

To meet the objective of providing information about financial position, financial performance and cash flows of an entity, financial statements should provide information about all of the following, except

a)

Assets, liabilities and equity

b)

Income and expenses, including gains and losses

c)

Contributions by and distribution to owners in their capacity as owners.

d)

Nature of the entity's business activities

57.

Which of the following is included in a complete set of financial statements?

a)

A statement by the board of directors of compliance with local legislation

b)

A statement of changes in equity

c)

Summarized statements of financial position for the last five years

d)

Value added statement

58.

What is the purpose of preparing the Statement of Financial Performance?

a)

inform stakeholders the profitability of business

b)

inform stakeholders the income and expenses of business

c)

inform stakeholders the nature of business

d)

inform stakeholders the size of business

59.

What is the purpose of the Statement of Financial Position?

a)

inform stakeholders the assets and liabilities of business

b)

provides information on how resources are obtained and used and the claim by the owner on the net assets of the business at a point in time.

c)

provides information on how resources are obtained and used in the business at a point in time.

d)

inform stakeholders the owner's equity of business

60.

Which of the following are Financial Statements for business?

a)

Trial Balance Account

b)

Ledger

c)

Income Statement

d)

Balance Sheet

61.

The users of accounting information are...

a)

Internal users

b)

External users

c)

Internal & External users

62.

Which one is the internal user?

a)

Potential investor

b)

Management of a company

c)

Creditor

63.

What does COGS stand for?

a)

cost of goals scored

b)

cost of goods stocked

c)

cost of goods sold

d)

cost of goods solvent

64.

Deficit means

a)

you have more revenue

b)

you have more money out than money in

c)

you are in the black

d)

you are in debit

65.

what is the purpose of an income statement?

a)

calculate the bank balance

b)

calculate net assets

c)

calculate sales

d)

calculate net profit

66.

How do you calculate gross profit?

a)

Sales - COGS

b)

Sales - NP

c)

COGS - Expenses

d)

COGS - NP

67.

By completing an Income Statement, you can make decisions. How could you improve sales?

a)

reduce selling prices

b)

reduce the cost price of your product

c)

increase advertising

d)

introduce a new product

68.

How could a business improve net profit?

a)

reduce expenses

b)

increase COGS

c)

reduce sales

d)

increase expenses

69.

Which of the following best describes the purpose of disclosure notes in the financial statements?

a)

To provide more detail for the users of financial statements about the information in the balance sheet and statement of profit or loss

b)

To allow companies to present their financial results in a more favourable way by only disclosingsome things in the notes and not on the main financial statements.

c)

To give all the detail of all the transactions that occurred during the period because the mainfinancial statements only present a summary.

d)

To explain the accounting treatment adopted where management have chosen not to apply accounting standards.

70.

Which ONE of the following statements correctly describes the contents of the Statement of Financial Position?

a)

A list of ledger balances shown in debit and credit columns

b)

A list of all the assets owned and all the liabilities owed by a business

c)

A record of income generated and expenditure incurred over a given period

d)

A record of the amount of cash generated and used by a company in a given period

71.

Which of the following expenditures is a capital expenditure?

a)

Purchase of raw material

b)

Purchase of plant

c)

Rent

d)

Depreciation

72.

The costs incurred in the day-to-day operations of an organization.

a)

Bookeeper

b)

Profit

c)

Revenue

d)

Expenses

73.

The total amount of money received from the sale of goods or services.

a)

Bookeeper

b)

Profit

c)

Revenue

d)

Expenses

74.

The difference between what it costs to make and sell a product and what a customer pays for it.

a)

Bookeeper

b)

Profit

c)

Revenue

d)

Expenses

75.

A “snapshot” of an organization’s financial position at a given time.

a)

Statement of Financial Position

b)

Statement of the Comprehensive Income

c)

Statements of Cash Flow

d)

Cost of Goods Sold

76.

Money owed to a company by its clients or customers who have promised to pay for products at a later date.

a)

Current Assets

b)

Account Receivable

c)

Current Liabilities

d)

Account Payable

77.

The amount a company owes to suppliers for goods and services purchased with credit.

a)

Current Assets

b)

Account Receivable

c)

Current Liabilities

d)

Account Payable

78.

A firm’s financial obligations to short-term creditors, which must be repaid within one year.

a)

Current Assets

b)

Current Liabilities

c)

Accounts Receivable

d)

Accounts Payable

79.

Cash

a)

Debit

b)

Credit

80.

Accounts Payable

a)

Debit

b)

Credit

81.

Accounts Receivable

a)

Debit

b)

Credit

82.

Capital

a)

Debit

b)

Credit

83.

Service Revenue

a)

Debit

b)

Credit

84.

Salaries Expense

a)

Debit

b)

Credit

85.

Interest Income

a)

Debit

b)

Credit

86.

Interest Receivable

a)

Debit

b)

Credit

87.

Interest Expense

a)

Debit

b)

Credit

88.

Accrued Interest

a)

Debit

b)

Credit

89.

Prepaid Expense

a)

Debit

b)

Credit

90.

Withdrawals

a)

Debit

b)

Credit

91.

Depreciation Expense

a)

Debit

b)

Credit

92.

Accumulated Depreciation

a)

Debit

b)

Credit

93.

Sales

a)

Debit

b)

Credit

94.

Cost of Sales

a)

Debit

b)

Credit

95.

Merchandise Inventory

a)

Debit

b)

Credit

96.

Sales Returns and Allowances

a)

Debit

b)

Credit

97.

Purchases

a)

Debit

b)

Credit

98.

What is the normal balance for the Revenue (Fees Earned) account?

a)

Debit

b)

Credit

99.

What is the normal balance for Asset accounts?

a)

Debit

b)

Credit

100.

What is a list of all accounts and their account numbers?

a)

General Journal

b)

General Ledger

c)

Chart of Accounts

d)

Trial Balance

First Exam Financial Management

Total questions: 100

Worksheet time: 35mins

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