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Questions and Answers
Which ratio measures the liquidity risk of a business and its ability to generate cash to meet short-term financial commitments?
Which ratio measures the liquidity risk of a business and its ability to generate cash to meet short-term financial commitments?
- Debt to Equity Ratio
- Overhead Rate
- Labour Multiplier
- Current Ratio (correct)
Which ratio measures whether a business is comfortable handling its debt obligations?
Which ratio measures whether a business is comfortable handling its debt obligations?
- Current Ratio
- Labour Multiplier
- Debt to Equity Ratio (correct)
- Overhead Rate
What is the formula for the current ratio?
What is the formula for the current ratio?
- Net revenue divided by direct labour costs
- Current assets divided by current liabilities (correct)
- Total overhead including indirect labour divided by direct labour costs
- Total liabilities divided by shareholders’ equity
What is the formula for the profit margin?
What is the formula for the profit margin?
Which of the following is the primary goal of financial management in an architectural practice?
Which of the following is the primary goal of financial management in an architectural practice?
What is the formula for calculating profit in a business?
What is the formula for calculating profit in a business?
What is the purpose of setting aside a percentage of profit as a capital reserve?
What is the purpose of setting aside a percentage of profit as a capital reserve?
Why is financial planning important in an architectural practice?
Why is financial planning important in an architectural practice?
Which of the following statements accurately describes the Average Collection Period (ACP)?
Which of the following statements accurately describes the Average Collection Period (ACP)?
Which of the following is a component of the Balance Sheet?
Which of the following is a component of the Balance Sheet?
What does the term 'Accounts Payable' refer to?
What does the term 'Accounts Payable' refer to?
Which type of accounting is done within the architectural practice?
Which type of accounting is done within the architectural practice?
Which type of accounting includes the preparation and examination of financial statements to express an opinion on the financial position of the practice?
Which type of accounting includes the preparation and examination of financial statements to express an opinion on the financial position of the practice?
What is the highest level of assurance provided by an external accountant?
What is the highest level of assurance provided by an external accountant?
Which accounting system records all income and expenses as they occur in the general ledger?
Which accounting system records all income and expenses as they occur in the general ledger?
Which financial statement shows the financial position of a company at a given period?
Which financial statement shows the financial position of a company at a given period?
Which financial statement focuses on profitability and growth?
Which financial statement focuses on profitability and growth?
Which financial statement is used to understand how to realize profit into cash?
Which financial statement is used to understand how to realize profit into cash?
Which financial statement is a detailed explanation of the change in cash on the balance sheet?
Which financial statement is a detailed explanation of the change in cash on the balance sheet?
Which of the following is a reason why a well-prepared cashflow projection may be necessary for negotiating a line of credit with the bank?
Which of the following is a reason why a well-prepared cashflow projection may be necessary for negotiating a line of credit with the bank?
What can an accountant provide advice on in relation to banks approving loans and lines of credit?
What can an accountant provide advice on in relation to banks approving loans and lines of credit?
In what chapter of the text can you find information on various methods of compensation or fee calculation?
In what chapter of the text can you find information on various methods of compensation or fee calculation?
Which of the following is NOT a responsibility of an accountant in an architect practice?
Which of the following is NOT a responsibility of an accountant in an architect practice?
What should be considered when preparing a cashflow forecast?
What should be considered when preparing a cashflow forecast?
What is the role of a Chartered Professional Accountant (CPA) in an architect practice?
What is the role of a Chartered Professional Accountant (CPA) in an architect practice?
When is the best time to negotiate for a line of credit with a bank?
When is the best time to negotiate for a line of credit with a bank?
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