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WorksheetsBusiness managements Multiple Choice Questions
Total questions: 20
Worksheet time: 10mins
What financial statement lists assets from current to long term?
balance sheet
income statement
cash flow statement
statement of retained earnings
Net income equals:
total revenue minus cost of goods sold
total revenue minus total expenses
operating revenue minus operating expenses
revenue minus expenses plus income taxes
Which is not a cash activity listed on the cash flow statememt?
operating activity
investing activity
purchasing activity
financing activity
What financial ratio helps management evaluate profits available for dividends?
retention rate
debt ratio
debt service coverage ratio
cash ratio
Earnings per share shows investors the __________ earned per outstanding share of stock.
operating income
income before taxes
net income
income before interest and taxes
The profit margin ratio measures the _______________ earned from each dollar of sales.
operating income
net income
income before taxers
income before interest and taxes
An income statement is based on the profit and loss account.
True
False
A balance sheet is like a photo of a company at a particular point in time.
TrueYes, this is
true.
False
A profit and loss statement shows how much cash (or cash equivalents) enters and leaves a company.
True
False
Cash flow statements help you determine the net worth of a company.
True
False
An income statement is based on which ONE of the following equations?
Profit = Fixed assets + Current assets
Income = Sales – Salary expenses
income = Sales + Assets
Profit = Income – Expenses
Which ONE of the following statements about a Profit and Loss Account is NOT correct?
A Profit and Loss Account shows the net profit of a company
A Profit and Loss Account can help business owners identify cash flow problems
A Profit and Loss Account shows how much money the business will make after all expenses are taken into consideration
A Profit and Loss Account shows sales and expenses over a period of time, rather than at a point in tim
Indicate which ONE of the following statements about a Balance Sheet is FALSE
A Balance Sheet is the same thing as a statement of net worth
An up-to-date Balance Sheet is essential if a business owner wants to arrange additional finance
In a Balance Sheet, total assets must be the same as total liabilities plus equity
A Balance Sheet gives the most complete picture possible of a company’s financial position
Indicate which ONE of the following statements about a Cash Flow Statement is INCORRECT
A Cash Flow Statement does not indicate whether a company is profitable or not
A Cash Flow Statement is always for historical performance (i.e. it reports on what has happened)
In a Cash Flow Statement, costs are included in the month that they are incurred, rather than spreading annual amounts equally over 12 months
A Cash Flow Statement shows the actual amount of money a company receives from its operations
Which report gives a review on the profitability of a business?
Statement of changes in equity
Cash flow statement
Income statement
Balance sheet
When assets are subtracted from liabilities it will be equal to?
Capital
Net income
Working capital
Goodwill
Which of the following options is not recorded in the Balance sheet?
Cash
Rent expenses
Building
Goodwill
A current asset that can be transferred into cash within three months is known as:
Cash equivalent
Intangible asset
Operating asset
Cash asset
Which of the following is not a characteristic of an asset?
It will bring future economic benefits to the business.
It is owned by the business
It can be held by the business for a short period of time.
It must have a physical substance.
Which of the following options is the most suitable for explaining the purpose of an income statement
Profitability
Movement of cash and profitability
Financial Position and movement of cash
Profitability and financial position
