Copyright
Developing Business Acumen  /  Business Courses

Test Prep Plan - Take a practice test

Take this practice test to check your existing knowledge of the course material. We'll review your answers and create a Test Prep Plan for you based on your results.
How Test Prep Plans work
1
Answer 50 questions
Test your existing knowledge.
2
View your test results
Based on your results, we'll create a customized Test Prep Plan just for you!
3
Study smarter
Study more effectively: skip concepts you already know and focus on what you still need to learn.

Goals of Financial Management 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. _____ is equal to sales minus costs of goods sold and operating expenses.

Question 2 2. _____ include selling expenses, general and administrative expenses, depreciation, and amortization.

Question 3 3. Which of the following are things that you own?

Question 4 4. Assets, liabilities and owner's equity are reported on which financial statement report?

Question 5 5. Nicole is the managing partner of a casual dining franchise. The store charges $2.99 for an unlimited refill soft drink, but her average cost of the soft drink is only $0.61. Unfortunately, a nationwide shortage of root beer has caused the cost to double. What financial trend should be most concerning to Nicole?

Page 2

Question 6 6. All businesses should monitor financial trends related to the price of _____ even if it is not their primary industry.

Question 7 7. The statement of cash flows is broken down into how many activities?

Question 8 8. What is the section of the statement of cash flows that includes activities that occur during the normal day-to-day operations of a company?

Question 9 9. Explain the purpose of an income statement.

Question 10 10. Why do business owners depend on the income statement?

Page 3

Question 11 11. Which of the following statements regarding the calculation of net loss is true?

Question 12 12. What does the acronym GAAP stand for?

Question 13 13. Which of the following is the simple formula for retained earnings?

Question 14 14. Which of the following is typically limited (by law) based on the amount of retained earnings for a year?

Question 15 15. Byron makes and sells flower arrangements for $50.00 per arrangement. His total expenses for each arrangement is $35.00. What is the net profit that Byron makes for each flower arrangement?

Page 4

Question 16 16. Net Profit is also known as _____.

Question 17 17. Company X wants to maximize its profits for shareholders. It decides to sell one of its poorly performing factories to a competitor. Will this be a good example of financial management?

Question 18 18. Which employees in a company are responsible for financial management?

Question 19 19. Which is calculated in economic profit and NOT included while calculating accounting profit?

Question 20 20.

Before starting her business, Judith used to work as a salesperson in a flower shop and earned an annual salary of $30,000.

In the first year of its operation, her business produced a total revenue of $70,000. The various payments made by the business amounted to $35,000. Calculate the economic profit of Judith's business in its first year.

Page 5

Question 21 21. What is the debt ratio?

Question 22 22. How is the operating profit ratio calculated?

Question 23 23. EBITDA = Operating Income + _____ + _____

Question 24 24. What are the standards that all financial reports are created by?

Question 25 25. Theodore owns a business that rents heavy construction equipment. He currently has a 5-year deal with the state government to supply all temporary signage. He only has one year left on the deal, so his goal is to find a new revenue source. As he pores over the data, he becomes so confused. The statistics seem to support one thing, but another data point will contradict the first. What should Theodore do about this?

Page 6

Question 26 26. Which of the sections of the statement of cash flows includes activities that involve cash receipts or cash payments from changes on long-term liabilities?

Question 27 27. On an income statement, _____ is/are the money that a company pays out.

Question 28 28. What is the basic idea of the 'matching principle?'

Question 29 29. What account are retained earnings added to?

Question 30 30. XYZ Company had $1,750,000.00 in total revenue. The total expenses for the company were $1,175,000.00. What was the net profit for XYZ Company?

Goals of Financial Management 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!

Support