Accounting and Financial in Business MCQs
Accounting and Financial in Business MCQs
Answer these 80+ Accounting and Financial in Business MCQs and assess your grip on the subject of Accounting and Financial in Business. Scroll below and get started!
1: Which one of these is an example of Accounting?
A. Invoices
B. Sales receipts
C. Bills and check
D. All of theses
2: Accrual basis method is a method of accounting in which _____ are recorded at the time they are incurred rather than when they are paid.
A. Income
B. Expenses
C. Losses
D. Both a and b
3: Aging Schedules is a listing of a Company’s firm receivable according to the length of time they are outstanding.
A. True
B. False
4: Assets are any resources that?
A. Business owns
B. Business rented
C. Expects to use resources
D. Both a and c
5: Asset Utilization Ratios are the financial ratios that measure the speed with which various asset accounts are converted into _____ ?
A. Sales
B. Cash
C. Both a and b
D. None of these
6: Select the correct options for credit sales in Average collection period:
A. Internal store credit
B. Not credit card sale
C. Cash
D. None of the above
7: Cash-Basis method is a method of accounting in which _____ are recorded at the time they are paid, rather than when they are incurred.
A. Income
B. Expenses
C. Products
D. Both a and b
8: Cash budgets is a plan for _____ uses and sources of cash.
A. Short-term
B. Long-term
C. Mid-term
D. All of these
9: Cash flow is the sum of net income plus any noncash expenses, such as:
A. Depreciation
B. Amortization
C. Both a and b
D. None of these
10: The difference between the actual amount of cash a company brings in and the actual amount of cash a company disburses in a given time period is known as Cash flow.
A. True
B. False
11: _____ is the period of time from when money is spent on raw mate-rials until it is collected from the sale of a finished good.
A. Cash-To-Cash Cycle
B. Product Life Cycle
C. Cash Flow Cycle
D. All of these
12: A financial statement that includes a percentage breakdown of each item.
A. Cash flow statement
B. Profit-and-Loss Statement
C. Disclosure Statements
D. Common size financial statement
13: _____ is a financial ratio that measures the number of times a firm can cover its current liabilities with its current assets.
A. Current ratio
B. Debt ratio
C. Financial ratio
D. None of them
14: _____ is a leverage ratio that measures the proportion of a firm’s total assets that is acquired with borrowed funds.
A. Current ratio
B. Debt ratio
C. Financial ratio
D. None of them
15: Double-Entry accounting is an accounting system in which every business transaction is recorded in an _____ so that the system will balance.
A. Asset account
B. Liability account
C. Owner’s equity account
D. All of these
16: _____ is a calculation that compares important financial aspects of a business.
A. Current ratio
B. Debt ratio
C. Financial ratio
D. None of them
17: Fixed asset turnover is an asset utilization ratio that measures how _____ a firm is using its assets to generate sales.
A. Efficiently
B. Inefficiently
C. Idle
D. Incompetent
18: General Ledger is a record of all financial transactions divided into accounts and usually compiled at the end of each _____ .
A. Day
B. Week
C. Month
D. Year
19: Generally Accepted Accounting Principles (GAAP) is a standard established so that all businesses produce _____ financial statements.
A. Dissimilar
B. Comparable
C. Incomparable
D. All of these
20: Income statement is a financial statement that shows the revenue and expenses of a firm, allowing you to calculate the _____ produced in a specific period of time.
A. Profit
B. Loss
C. Productivity
D. Both a and b
21: Industry Average Analysis is a comparison of a firm’s _____ to the industry averages.
A. Current ratio
B. Debt ratio
C. Financial ratio
D. None of them
22: Inventory Turnover is an asset utilization ratio that measures the liquidity of the firm’s inventory—how quickly goods are _____.
A. Sold
B. Replenished
C. Deplete
D. Both a and b
23: Journal is a _____ of all financial transactions of a business.
A. Irregular record
B. Intermittent record
C. Chronological record
D. All of these
24: _____ is a financial ratio that measures the extent to which a firm uses debt as a source of financing and its ability to service that debt.
A. Leverage ratios
B. Liquidity ratios
C. Debt ratio
D. Current ratio
25: Liabilities is a debt owed by a business to another _____.
A. Organization
B. Individual
C. Both a and b
D. None of these
26: _____ is a financial ratio used to measure a firm’s ability to meet its short-term obligations to creditors as they come due.
A. Leverage ratios
B. Liquidity ratios
C. Debt ratio
D. Current ratio
27: _____ is a list of accounts receivable by age category.
A. Macro-Aging Schedule
B. Micro-Aging Schedule
C. Nano-Aging Schedule
D. All of these
28: _____ is a list of accounts receivable showing each customer, the amount that customer owes, and the amount that is past due.
A. Macro-Aging Schedule
B. Micro-Aging Schedule
C. Both a and b
D. None of these
29: Net profit margin is a profitability ratio that measures the percentage of each sales dollar that remains as profit after all _____.
A. Expenses been paid
B. Including taxes been paid
C. Both a and b
D. None of these
30: Owner's Equity is the amount of money the owner of a business would receive if some of the assets were sold and all liabilities were paid.
A. True
B. False
31: _____ is a financial ratio that is used to measure the ability of a company to turn sales into profits and to earn profits on assets and owner’s equity committed.
A. Profitability Ratios
B. Leverage ratios
C. Liquidity ratios
D. All of these
32: _____ is financial statements that project what a firm’s financial condition will be in the future.
A. Cash flow statement
B. Profit-and-Loss Statement
C. Pro Forma Financial Statements
D. Common size financial statement
33: _____ is a financial ratio that measures a firm’s ability to meet its current obligations with the most liquid of its current assets.
A. Profitability Ratios
B. Leverage ratios
C. Liquidity ratios
D. Quick ratio
34: _____ is a profitability ratio that indicates the firm’s effectiveness in generating profits from its available assets.
A. Return on assets
B. Return on investment
C. Return on Equity
D. Both a and b
35: _____ is a profitability ratio that measures the return the firm earned on its owner’s investment in the firm.
A. Return on Assets
B. Return on Investment
C. Return on Equity
D. Both a and b
36: SIngle entry accounting is basically a checkbook.
A. True
B. False
37: SIngle Entry accounting is an accounting system in which the flow of _____ is recorded in a running log.
A. Income
B. Expenses
C. Loss
D. Both a and b
38: _____ is a financial statement that shows the cash inflows and outflows of a business.
A. Cash flow statement
B. Profit-and-Loss Statement
C. Pro Forma Financial Statements
D. Common size financial statement
39: Statement of cash flow is a financial statement that shows the cash _____ of a business.
A. Inflows
B. Outflows
C. Both a and b
D. None of these
40: Times Interest earned is a leverage ratio that calculates the firm’s ability to meet its interest requirements.
A. True
B. False
41: _____ is an asset utilization ratio that measures how efficiently the firm uses all of its assets to generate sales.
A. Total asset turnover
B. Fixed asset turnover
C. Both a and b
D. None of these
42: Trend analysis is a comparison of a single firm’s present performance with its own _____ preferably for more than two years.
A. Current Performance
B. Past Performance
C. Future Performance
D. All of these
43: Trend analysis is a comparison of a single firm’s present performance with its own past performance preferably for more than _____.
A. Two days
B. Two months
C. One year
D. Two year
44: The measure of how long it takes a firm to convert a credit sale into a usable form is known as which of the following?
A. Average collection period
B. Inventory turnover
C. Quick ratio
D. Current ratio
45: Each business day, 12 small businesses in the United States declare bankruptcy primarily for which of the following?
A. Lack of sales
B. Inexperienced management
C. Poor cash-flow management
D. Increasing expenses
46: Which of the following financial actions should be made on a weekly basis by a small business manager?
A. Check your cash balance on hand
B. Note especially slow-paying accounts
C. Record any money paid out
D. Review federal tax requirements
47: High average collection periods usually indicate ______.
A. Sales that are increasing
B. Accounts receivable that are all being collected
C. Many uncollected accounts receivable
D. Overly restrictive credit policies
48: Calculations that compare the important financial aspects of a business are called ______.
A. Financial ratios
B. Overview ratios
C. Accounting ratios
D. Analytical ratios
49: The financial record that summarizes the income and expenses of the business over time is the ______.
A. Income statement
B. Balance sheet
C. Statement of retained earnings
D. Statement of cash flows
50: Financial statements that project what a firm’s financial condition will be in the future are known as ______.
A. Pro forma financial statements
B. Common-size financial statements
C. Balance sheets
D. Statements of cash flows
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Accounting and Financial in Business MCQs
