FAR — Financial Accounting & Reporting — Quiz 80

Questions in this quiz (10)

1. Which of the following is considered an efficiency ratio?

   • Accounts receivable turnover ratio
   • Current ratio
   • Debt ratio
   • Profit margin ratio

2. Which financial ratio measures the percentage of income remaining after expenses?

   • Profit margin ratio
   • Current ratio
   • Inventory turnover ratio
   • Debt ratio

3. What is the primary purpose of financial ratio analysis?

   • To eliminate accounting estimates
   • To compare financial performance across periods or companies
   • To record transactions
   • To prepare tax returns

4. Which statement best explains the role of financial analysis in decision-making?

   • It replaces financial statements
   • It provides insights into financial performance and risk
   • It eliminates accounting errors
   • It guarantees profitability

5. Which of the following best describes managerial accounting?

   • Accounting used for external reporting
   • Accounting used by managers for planning and decision-making
   • Accounting used only for taxes
   • Accounting used by government agencies

6. Which statement distinguishes managerial accounting from financial accounting?

   • Managerial accounting focuses on internal users
   • Managerial accounting reports historical data only
   • Financial accounting is used only by managers
   • Financial accounting ignores standards

7. Which is a primary function of managerial accounting?

   • Preparing tax returns
   • Providing information for decision-making
   • Filing government reports
   • Preparing audit reports

8. Which of the following best describes a budget?

   • A record of past financial results
   • A financial plan for a future period
   • A list of liabilities
   • An audit report

9. Which of the following best describes a master budget?

   • A marketing budget
   • A comprehensive plan combining all budgets
   • A payroll report
   • A tax document

10. Which budget forecasts expected sales?

    • Production budget
    • Sales budget
    • Cash budget
    • Operating budget