Financial Accounting Basics Quiz

Which of the following represents the calculation for Net Profit?

Current liabilities are debts that must be paid within a year.

What is the formula for calculating Gross Profit?

The statement of financial position provides a snapshot of a company's assets, liabilities, and ______ at a specific point in time.

Match the following terms with their corresponding definitions:

What type of expenditure is a new machine purchased for €10,000?

Payment for repairs to the machine is classified as capital expenditure.

What are two examples of revenue expenditure?

The cost of _______ to bring the machine to the firm is classified as capital expenditure.

Match the following expenditures with their classifications:

Which of the following is NOT considered capital expenditure?

Revenue expenditure increases the value of non-current assets.

Distinguish between capital and revenue expenditure.

What are two primary functions of the Malta Financial Services Authority (MFSA)?

Fixed costs vary with the level of production and sales volume.

Define the term 'variable costs'.

What is one reason businesses require financing?

Sole proprietorships typically rely on venture capital for financing.

Examples of fixed costs include ______ and _____ .

What type of financing is essential for companies undergoing expansion and growth?

Match the following costs to their definitions:

How much are the variable costs per unit in Mr. Camilleri's proposed business?

Corporations often have access to a wider range of financing options, including ___ financing through public offerings.

Which type of business organization may depend on external funding sources like bank loans?

The total cost is the sum of fixed costs and variable costs.

What are two examples of variable costs?

Startups usually have low initial capital requirements.

Match the following business types with their primary financing needs:

Why do industry-specific businesses have different financial needs?

What is the gross profit margin calculated for Susan's retail firm?

Current liabilities exceed current assets in Susan's financial statement.

What is capital employed?

The _____ of Profit or Loss shows the revenues and expenses of a company over a specific period.

What are two disadvantages of having a high inventory level?

What are purchases in the context of a business?

Match the following financial statements with their purposes:

The cost of sales formula includes averaging the _____ and closing inventory.

What is the fixed cost derived from the following equation: Fixed cost + 700 × 15 = 11,000?

What type of expenditure is incurred when purchasing an extra piece of machinery?

Painting an extension of a business when it was first built is classified as __________.

Match the following items with their classification as Capital or Revenue Expenditure:

Which of the following is classified as revenue expenditure?

Repairs to the roof are considered capital expenditure.

In financial statements, how does capital expenditure affect the Statement of Financial Position?