Equations
What fundamental equation represents the relationship between a company's assets, liabilities, and equity?
Assets = Liabilities + Owners Equity.
What type of account represents what a company owes to its creditors?
Liability account
What term describes the difference between a company's revenues and expenses?
Net Profit (if revenues exceed expenses)
Net loss (if expenses exceed revenues)
This type of accountant works with clients to prepare tax returns, conduct audits, and provide financial consulting services.
Public Accountant
How do you calculate the Working Capital of a business?
WC = SA - SL
What is the equation to calculate Owners Equity?
Assets - Liabilities = Owners Equity
Which financial statement reports a company's revenues and expenses over a period of time?
Income statement.
What type of account represents the owner's claim to the assets of the company?
Equity account.
This type of accountant is responsible for helping organizations make strategic financial decisions by analyzing financial data and trends.
Management Accountant
How do you calculate the Gross Profit margin of a business?
GP = (GP/TR)x100
What is the equation to calculate Net Profit?
Gross Profit - Operating Expenses
What type of account represents what a company owns outright?
Asset account.
What accounting describes amount of money that is owned to you by your customers?
Accounts Receivable
This type of accountant investigate financial crimes and provide litigation support by analyzing financial records and transactions.
Forensic Accountants
What is a healthy current ratio?
2
What is the equation to calculate COGS?
Beginning Inventory + Purchases - Ending Inventory = Cost of Goods Sold
Which financial statement reports a company's financial position at a specific date?
Balance sheet.
What type of account represents a company's investments in other companies?
Investment account
This type of profession assesses the performance of investments, analyzes financial data, and creates financial models to guide investment decisions.
Financial Analyst
What does it mean if you have a negative Net Profit Margin?
Inefficient management
High operating expenses
Weak pricing strategies
What is the equation to calculate Net Profit Margin?
Net Profit Margin = ( Net Profit / Total Revenue) x 100
Which financial statement shows the cash inflows and outflows of a company over a period of time?
Cash flow statement.
What type of account represents the amounts received from customers in advance of providing goods or services?
Unearned revenue account
What is the name of the designation that accounts needs to obtain?
CPA - Chartered Professional Accountant
How would you do to increase your net profit margin if you have a Gross Profit Margin of 25% and a Net Profit Margin of (15%)?
Increase your prices which will increase your gross profit margin
Lower your operating expenses.