1
True or False
Is the business able to repay the loan to the bank?
That's a problem in which the workers need accounting information.
False
True or False
In financial accounting, information is only made available to managers of the business – internal users.
False
Which one is NOT included in foundations of accounting?
A. accruals
B. the money measurement principle
C. conservatism
D. the realisation concept
E. old changes
E
This is the difference between the value of what a company owns (assets) and what it owes (liabilities).
A. Income statement
B. Statement of financial position
C. Cash-flow statement
B
Trade receivable is the example of current assets.
True
To assess whether the business is a good credit risk is the accounting information used by ....
Creditors
To establish whether there will be security of spare parts and service facilities is accounting information used by ....
Customers
To decide whether the business has potential for growth is accounting information used by ....
Investors
To see if the business is profitable and likely to expand, which could be good for the local economy is accounting information used by ....
Local community
To assess whether to allow an increase in overdraft facilities is accounting information used by ....
Banks
Presenting the company accounts in a favourable light – to flatter the business performance is called ....
Window-dressing
Trading account involves gross profit, cost of sales, and ....
revenue
The profit left after all deductions, including dividends, have been made, this is ‘ploughed back’ into the company as a source of finance is called ....
Retained earnings/profit
A financial obligation of a business that it is required to pay in the future is called ....
Liability
One-off profit that cannot easily be repeated or sustained is called ...
Low-quality profit
Keviners Ltd
Gross profit $100,000
Revenue $1,000,000
The gross profit margin is ....
10%
Rheign citizens Ltd
Current liabilities $40,000
Acid test ratio is 0.2
Liquid assets are ....
$8,000
Sweet Damariska Ltd
Current assets $50,000
Inventories $40,000
Current liabilities $10,000
Acid test ratio is ....
1
Jvnism Ltd
Operating profit margin is 25%
Revenue $2,000,000
The operating profit is ....
$500,000
Kents and Barbies Ltd
Current assets $90,000
Current liabilities $30,000
Current ratio is ....
3
Calculate gross profit for Sigit Novel Ltd for the financial year ending 31 December 2022.
■ 2,500 items sold for $4 each
■ opening stocks were valued at $3000
■ purchases totaled $13,000
■ closing stocks were $6,000.
$0
Paulus Fitness Ltd sold 800 units in the last financial year ending 31 March 2023.
The selling price was $8.
Opening stocks were 50 boxes.
The business purchased 1,000 boxes during the year.
All boxes cost the company $4 each.
Calculate the value of closing stocks.
Opening stocks 50 x $4 = $ 200
Purchasing 1,000 x $4 = $4,000
Total stocks $4,200
Cost of sales 800 x $4 $3,200
Closing stocks = total stocks - cost of sales
= $4,200 - $3,200
= $1,000
Tri 456789 Ltd
Revenue $100,000
Cost pf sales $ 35,000
Expenses $ 25,000
Interest $ 15,000
Tax $ 12,555
Dividends $ 12,444
Retained earning is ....
$1
Opening stocks (at the start of the year) $ 400
Purchases during the year $ 600
Total stock (available for sale) $1,000
Closing stocks (at the end of the year) $ 250
Cost of sales is ....
$ 750
Leticia Nihoma Ltd sold 800 units in the last financial year ending 31 March 2023.
The selling price was $8.
Opening stocks were 50 boxes.
The business purchased 1,000 boxes during the year.
All boxes cost the company $4 each.
Calculate the gross profit.
Gross profit = Revenue - Cost of sales
= (800x8) - (800x4)
=$6,400 - $3,200
=$3,200