Cashflow Forecasting and Monitoring Quiz

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Which financial statement shows the financial position of a company at a given period?

Balance Sheet (correct)

Cashflow Statement

Income Statement

Statement of Revenues over Expenditures

What is the basic formula of the balance sheet?

Cashflow = Cash Inflow - Cash Outflow

Income – Expenses = Profit or Loss

Assets = Liabilities + Owner’s Equity (correct)

Profit = Revenue - Expenses

Which financial statement provides a detailed explanation of the change in cash on the balance sheet?

Balance Sheet

Income Statement

Statement of Changes in Financial Position

Cashflow Statement (correct)

What is the primary focus of the income statement?

Profitability and growth Signup and view all the answers

Which of the following is the correct definition of Accounts Payable?

A record of accounts of money payable to consultants and to other suppliers for expenses Signup and view all the answers

What is the formula for calculating the Average Collection Period (ACP)?

Accounts receivable divided by gross revenue x 365 Signup and view all the answers

What is the purpose of a Cash Book?

To record the day-to-day cash position of the practice using the cash accounting method Signup and view all the answers

Which type of accounting is done within the architectural practice?

Internal accounting Signup and view all the answers

Which type of accounting provides a lower level of assurance that the financial statements are free of material misstatements?

Review accounting Signup and view all the answers

What is the recommended level of assurance that banks typically require for financial statements?

Review Signup and view all the answers

What is the accounting method required for architecture businesses by the Canada Revenue Agency (CRA), Accounting Standards for Private Enterprises (ASPE), and International Financial Reporting Standards (IFRS)?

Accrual basis Signup and view all the answers

Which of the following is true about cashflow forecasts?

They should be updated monthly Signup and view all the answers

What is the role of a Chartered Professional Accountant (CPA)?

To maintain proper books of account Signup and view all the answers

What is the purpose of establishing a professional relationship with a banker?

To avoid financing day-to-day operations Signup and view all the answers

When is the best time to negotiate for a line of credit with a bank?

When funds for the operation of the practice are not required Signup and view all the answers

Which of the following is a reason why a well-prepared cashflow projection may be necessary to negotiate a line of credit with the bank?

To accurately monitor and control expenses Signup and view all the answers

What is the only possible exception to the principle that all projects should generate a profit?

When undertaking a new and unknown building type Signup and view all the answers

Where can architects find various forms for financial management purposes, including fee calculation?

Chapter 3.11 - Standard Templates for the Management of the Practice Signup and view all the answers

Which of the following is true about financial management in architectural practice?

Financial management helps maximize profit and develop strategies to remain profitable Signup and view all the answers

What is the purpose of a profit in architectural practice?

All of the above Signup and view all the answers

What is the recommended practice for distributing profits in an architectural practice?

Set aside a percentage as a capital reserve and distribute the remaining balance to shareholders and staff Signup and view all the answers

Why is financial planning important in architectural practice?

All of the above Signup and view all the answers

Which one of the following formulas is used to calculate the current ratio?

Current assets divided by current liabilities Signup and view all the answers

What does a current ratio of 1:1 indicate?

The business has $1 in liabilities for every $1 in assets Signup and view all the answers

What does the debt to equity ratio measure?

Whether the business is comfortable handling its debt obligations Signup and view all the answers

What does the profit margin ratio measure?

How much profit is left over after all expenses are accounted for Signup and view all the answers

Cashflow Forecasting and Monitoring Quiz

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Questions and Answers

Which financial statement shows the financial position of a company at a given period?

What is the basic formula of the balance sheet?

Which financial statement provides a detailed explanation of the change in cash on the balance sheet?

What is the primary focus of the income statement?

Which of the following is the correct definition of Accounts Payable?

What is the formula for calculating the Average Collection Period (ACP)?

What is the purpose of a Cash Book?

Which type of accounting is done within the architectural practice?

Which type of accounting provides a lower level of assurance that the financial statements are free of material misstatements?

What is the recommended level of assurance that banks typically require for financial statements?

What is the accounting method required for architecture businesses by the Canada Revenue Agency (CRA), Accounting Standards for Private Enterprises (ASPE), and International Financial Reporting Standards (IFRS)?

Which of the following is true about cashflow forecasts?

What is the role of a Chartered Professional Accountant (CPA)?

What is the purpose of establishing a professional relationship with a banker?

When is the best time to negotiate for a line of credit with a bank?

Which of the following is a reason why a well-prepared cashflow projection may be necessary to negotiate a line of credit with the bank?

What is the only possible exception to the principle that all projects should generate a profit?

Where can architects find various forms for financial management purposes, including fee calculation?

Which of the following is true about financial management in architectural practice?

What is the purpose of a profit in architectural practice?

What is the recommended practice for distributing profits in an architectural practice?

Why is financial planning important in architectural practice?

Which one of the following formulas is used to calculate the current ratio?

What does a current ratio of 1:1 indicate?

What does the debt to equity ratio measure?

What does the profit margin ratio measure?

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