WorksheetsBUSINESS
Total questions: 55
Worksheet time: 38mins
What does. financial plan include?
expenses
needs
goals
benchmarks
past revenue
financial planning steps
identify & purchase assets
dress accounting requirements
need and forecast
accounting has to do with _ and _
FORMAT: (1/2)
(a)
accounting helps make a business more _
effective
efficient
The financial manager
manages funds
makes sure business meets obligations
Find sources for funds
what is a budget in a business
A budget is a financial plan for a business that estimates expenses.
there are three types off budget, what are they?
Operational budget, start budget, cash flow budget
the start up budget is for what
the operating budget covers day to day
fiscal period is like tax period
balance sheet in Spanish
(a)
cash flow statement in Spanish
(a)
income statement in spanish
(a)
the method used to record all financial transactions
what are the GAAP rules.
State the name
(a)
Gaap rules are obligatory in all US businesses.
true
false
GAAP rules make the business look
fundamental accounting equation
WRITE WITH NO SPACES
(a)
(#) represents
a negative number
a positive number
a write off
that i is accounts payable so it will be payed later
assets can be considered to be:
large value assets
small assets
long term assets
current assets
current assets are
Long-term investments that can be turned into cash in 3
Assets you can turn into cash fastly, less than a year
fixed assets
expect to have for a long time
will sell or get in cash in 1 year
liabilities are values owed
true
false
(a) :loans I expect to pay in less than a year. They include accounts payable and wages payable
(a) : loans I will pay in more than a year.
balance sheet is a
status report
flow report
owners equity define
The owners claim over the property.
The logic with the (a) is that the money used to purchase assets comes from either debt or owners equity
the income statement is a _ report
flow
status
the cash is a _ report
flow
status
the income statement is also called the
(a)
income statement shows:
Shows the flow of the revenue and expenses
net income
revenue - expenses = (a)
INCOME STATEMENT
revenue-cogs=
(a)
INCOME STATEMENT
gross profit - (a) = net operating income
INCOME STATEMENT
net operating income - taxes and interest = _
(a)
net income can also be called (a)
in the cash flow statement
it is a _ report
(a)
define the cash flow statement
How much cash comes in or out during a specific period.
in the cash flow statement
it is a _ report
(a)
Operating Cash
Cash that came in from sales of goods or service and interests. Cover expenses from day to day.
Fixed assets (buildings) and financial assets (long term investments)
issuing shares of stock, outflows from dividends
financing
Cash that came in from sales of goods or service and interests. Cover expenses from day to day.
Fixed assets (buildings) and financial assets (long term investments)
issuing shares of stock, outflows from dividends
<p>Cash that came in from sales of goods or service and interests. Cover expenses from day to day.</p>
(a)
types of accounts
Assets
Liabilities
Revenue
Owner's Equity
Owners Equity
Retained earnings
Capital invested
Stock
dividends
accounts receivable
accounts that people owe to the busines
accounts recievable
accounts payable
accounts that a
accounts recievable
accounts payable
accounts that the Business owe to the banks
accounts recievable
accounts payable
accounts that
accounts recievable
accounts payable
A startup purchases $50,000 worth of computer equipment and expects to use it for 5 years. At the same time, it has $20,000 in cash that can cover payroll and bills for the next three months.
Question: On the balance sheet, how would these two items be classified, and why would misclassifying them create a misleading financial position?
A) Both should be classified as current assets; they can both be converted to cash quickly.
B) Equipment is a fixed asset; cash is a current asset. Misclassification would distort liquidity.
C) Both are fixed assets since they belong to the company.
D) Equipment is an expense; cash is revenue.
A company prepared a cash budget showing it would have $10,000 left at the end of the month. However, unexpected repairs cost $12,000, forcing the company to borrow.
Question: Which type of budget (startup, cash, or operating) failed to capture this situation, and what does this reveal about the limitations of budgeting?
A) Startup budget, because it did plan for new projects and it means that they need money for them so it would be in the startup budget.
B) Cash budget, because it underestimated unexpected expenses and liquidity needs.
C) Operating budget, because it only tracks day-to-day sales.
D) Fiscal budget, because it did not account for taxes.
3. Balance Sheet & Liabilities
A retail company has $100,000 in accounts receivable and $80,000 in accounts payable, all due within the year. It also has a 10-year bank loan of $500,000.
Question: If an investor only looked at the company’s current ratio (current assets ÷ current liabilities), how might they misinterpret the company’s actual long-term financial risk?
A) They would see strong liquidity now but ignore massive long-term debt.
B) They would think the company has poor liquidity even though it is safe.
C) They would confuse equity with liabilities.
D) They would assume accounts receivable is the same as cash.
4. Income Statement & Profitability
A business reports $200,000 in revenue, $120,000 in COGS, and $50,000 in operating expenses. However, it owes $40,000 in taxes and interest.
Question: Why might management brag about their “high operating profit” even though the net income looks weak, and how could this affect investor confidence?
A) Because operating profit ignores taxes/interest, it looks strong, but net income tells the real story. Investors may feel misled.
B) Because operating profit includes dividends, which makes it appear inflated.
C) Because net income is always higher than operating profit.
D) Because revenue guarantees cash flow regardless of expenses.
5. Cash Flow Statement & Financing
A company reports positive net income for the year but is struggling to pay suppliers because it reinvested heavily in new buildings and equipment.
Question: How could the cash flow statement reveal this problem even when the income statement looks strong, and which section (operating, investing, financing) would show the issue?
A) Operating section, because net income does not equal cash flow.
B) Investing section, because large purchases of fixed assets drain cash.
C) Financing section, because dividends reduce equity.
D) Balance sheet, because assets and liabilities balance each other out.
