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Accounting Equations & Formulas Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Page 1

Question 1 1. Which of the following are part of the accounting equation?

Question 2 2. Sarah is trying to determine the NPV of a simple one-time payment. Which table should she use?

Question 3 3. The time value of money teaches us that

Question 4 4. What does it mean when ROE declines from one year to the next?

Question 5 5. Why is net present value important to companies?

Page 2

Question 6 6. Tom is saving for a down payment on a new automobile. If he wants his savings account (which is earning a 5% interest rate) to be worth $5,000 in 3 years, how much money will he need to invest today?

Question 7 7. Which of the following statements correctly describes the relationship between existing bond prices and market interest rates?

Question 8 8. Why is it difficult to manage indirect costs?

Question 9 9. What is one reason for calculating direct costs?

Question 10 10. As a potential investor, what are some factors you will analyze before making a decision about the stock perormance?

Page 3

Question 11 11. John's company has assets of $500,000 and owner's equity of $200,000. Calculate John's company's liabilities.

Question 12 12. If a company made $200,000 in sales in one year and paid $120,000 in total expenses and taxes, what would the accounting profit be?

Question 13 13. Which chart do you need to compute the current value of multiple payments over time?

Question 14 14. Accounting profit is calculated as:

Question 15 15. Why is it important to manage indirect costs?

Page 4

Question 16 16. What is the formula for calculating prime costs?

Question 17 17. What is another term for indirect costs?

Question 18 18. What is the best definition of ROE?

Question 19 19. A bond is _____.

Question 20 20. According to the accounting equation, accounts are balanced when assets:

Page 5

Question 21 21. Which of the following is the difference between assets and liabilities?

Question 22 22. What is the present value of a series of $50,000 payments for 10 years at an interest rate of 5% per year?

Question 23 23. What are prime costs?

Question 24 24. What part of the basic accounting equation is broken down into three other categories to create the extended accounting equation?

Question 25 25. Money that is paid out of a company for items necessary for daily operations is called _____.

Page 6

Question 26 26. What is one way direct costs are calculated?

Question 27 27. Which of the following would NOT be included in accounting profit?

Question 28 28. Samantha just celebrated her first holy communion. Her parents opened a savings account (that earns 3% interest) for her to deposit the money that was gifted to her on this special occasion. Samantha deposits the $400 from her party. What will that amount will be worth in exactly 1 year from now?

Question 29 29. Which of the following are part of the basic accounting equation?

Question 30 30. Net present value refers to the concept that:

Accounting Equations & Formulas Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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