Financial Management Exam February 2024

<p>The amount owed to suppliers for credit purchases. (D)</p> Signup and view all the answers

<p>It increases the carrying amount of total non-current assets. (B)</p> Signup and view all the answers

<p>Annual Depreciation Expense (B)</p> Signup and view all the answers

<p>It decreases total equity by the amount withdrawn. (A)</p> Signup and view all the answers

<p>Straight-Line Method (B)</p> Signup and view all the answers

<p>Reducing rent expenses (C)</p> Signup and view all the answers

<p>Recorded as cash flows from operating activities (D)</p> Signup and view all the answers

<p>Net profit accounts for the movement in equity (B)</p> Signup and view all the answers

<p>€21,000 (A)</p> Signup and view all the answers

<p>It increases the net profit margin (D)</p> Signup and view all the answers

<p>Increases assets (C)</p> Signup and view all the answers

<p>Trade receivables relating to an amount owed from customers. (D)</p> Signup and view all the answers

<p>€320,000 (A)</p> Signup and view all the answers

<p>An expense (C)</p> Signup and view all the answers

<p>Gross profit, EBITDA, EBIT and net profit are affected. (A)</p> Signup and view all the answers

<p>€360,000 (C)</p> Signup and view all the answers

<p>EBITDA, EBIT and net profit increased by €25,000. (B)</p> Signup and view all the answers

<p>A component of shareholders' equity. (D)</p> Signup and view all the answers

<p>It will affect the cash flow in the long term. (C)</p> Signup and view all the answers

<p>€290,000 (D)</p> Signup and view all the answers

<p>The statement of cash flows shows the total amount of inventories purchased. (B)</p> Signup and view all the answers

<p>€120,000 (C)</p> Signup and view all the answers

<p>Total revenues minus total cost of sales. (B)</p> Signup and view all the answers

<p>Higher perceived profitability. (C)</p> Signup and view all the answers

<p>Total revenue reported for the year. (A)</p> Signup and view all the answers

<p>Sales returns during the period. (D)</p> Signup and view all the answers

<p>Gross profit is calculated before deducting operating expenses. (B)</p> Signup and view all the answers

<p>€7,289.31 (B)</p> Signup and view all the answers

<p>27 m² (A)</p> Signup and view all the answers

<p>29.7 m² (A)</p> Signup and view all the answers

<p>€45 (A)</p> Signup and view all the answers

<p>€1,366.20 (B)</p> Signup and view all the answers

<p>360g (C)</p> Signup and view all the answers

<p>€4.98 (D)</p> Signup and view all the answers

<p>€9.00 (B)</p> Signup and view all the answers

<p>2 wagons (B)</p> Signup and view all the answers

<p>84.6% (C)</p> Signup and view all the answers

<p>Both statements are correct (C)</p> Signup and view all the answers

<p>$21,300 (A)</p> Signup and view all the answers

<p>Higher delivery cost (A)</p> Signup and view all the answers

<p>18% only on the equipment cost (B)</p> Signup and view all the answers

<p>Lower initial investment cost (A)</p> Signup and view all the answers

<p>54,726 visits (B)</p> Signup and view all the answers

<p>Trade receivables relating to an amount owed from customers (A)</p> Signup and view all the answers

<p>Gross profit, EBITDA, EBIT and net profit are affected (D)</p> Signup and view all the answers

<p>€360,000 (B)</p> Signup and view all the answers

<p>EBITDA, EBIT and net profit increased by €25,000 (D)</p> Signup and view all the answers

<p>Intangible assets (C)</p> Signup and view all the answers

<p>A liability (A)</p> Signup and view all the answers

<p>As cash flows from financing activities (A)</p> Signup and view all the answers

<p>4,200 visits (D)</p> Signup and view all the answers

<p>A variable cost (A)</p> Signup and view all the answers

<p>43% (B)</p> Signup and view all the answers

<p>High proportion of fixed costs (D)</p> Signup and view all the answers

<p>184 t-shirts (A)</p> Signup and view all the answers

<p>€9,000 (A)</p> Signup and view all the answers

<p>€8,000 (C)</p> Signup and view all the answers

<p>€1,100 (A)</p> Signup and view all the answers

<p>€39 (C)</p> Signup and view all the answers

<p>€3,578 (C)</p> Signup and view all the answers

<p>6.8% (D)</p> Signup and view all the answers

<p>€16 (A)</p> Signup and view all the answers

<p>Reduced working hours (C)</p> Signup and view all the answers

<p>40% (A)</p> Signup and view all the answers

<p>36 hours (B)</p> Signup and view all the answers

<p>€290,000 (A)</p> Signup and view all the answers

<p>It reflects the assets, liabilities, and equity at a specific point in time. (B)</p> Signup and view all the answers

<p>€160,000 (C)</p> Signup and view all the answers

<p>It indicates the cash payments made for inventory purchases. (D)</p> Signup and view all the answers

<p>It shows the profit generated during the accounting period. (B)</p> Signup and view all the answers

<p>Inventories sold are reflected in the statement of cash flows. (C)</p> Signup and view all the answers

<p>It leads to cash outflow for the purchase of inventories. (B)</p> Signup and view all the answers

<p>The total profit before expenses is €80,000. (D)</p> Signup and view all the answers

<p>€136,667 (C)</p> Signup and view all the answers

<p>€60,000 (A)</p> Signup and view all the answers

<p>As cash flows from operating activities. (D)</p> Signup and view all the answers

<p>€100,000 (D)</p> Signup and view all the answers

<p>Only the net profit accounts for movements in Equity. (A)</p> Signup and view all the answers

<p>Total sales from both credit and cash transactions (D)</p> Signup and view all the answers

<p>€4,200,000 (D)</p> Signup and view all the answers

<p>Profit levels will decrease. (A)</p> Signup and view all the answers

<p>The total amount of current assets stays the same. (A)</p> Signup and view all the answers

<p>Reduce operating costs significantly (C)</p> Signup and view all the answers

<p>€78,000 (A)</p> Signup and view all the answers

<p>Operating expenses (B)</p> Signup and view all the answers

<p>€500,000 (D)</p> Signup and view all the answers

<p>€80,000 (C)</p> Signup and view all the answers

<p>€180,000 (B)</p> Signup and view all the answers

<p>As cash flows from investing activities (C)</p> Signup and view all the answers

<p>4,200 visits (A)</p> Signup and view all the answers

<p>A variable cost (B)</p> Signup and view all the answers

<p>43% (C)</p> Signup and view all the answers

<p>A high margin of safety (B)</p> Signup and view all the answers

<p>150 (C)</p> Signup and view all the answers

<p>€3,000 (C)</p> Signup and view all the answers

<p>Higher risk during economic downturns (C)</p> Signup and view all the answers

<p>€28,000 (D)</p> Signup and view all the answers

<p>It increases the carrying amount by €40,000. (C)</p> Signup and view all the answers

<p>As cash flows from financing activities. (A)</p> Signup and view all the answers

<p>It is the amount owed to suppliers for credit purchases. (C)</p> Signup and view all the answers

<p>€460,000 (D)</p> Signup and view all the answers

<p>Cost minus residual value divided by useful life. (B)</p> Signup and view all the answers

<p>€1,200 (A)</p> Signup and view all the answers

<p>The estimated value of the asset at the end of its useful life. (C)</p> Signup and view all the answers

<p>€34.20 (B)</p> Signup and view all the answers

<p>€480,000 (A)</p> Signup and view all the answers

<p>35 hours (D)</p> Signup and view all the answers

<p>6.8% (A)</p> Signup and view all the answers

<p>Only the clicks after the initial 500 are calculated at a lower rate. (B)</p> Signup and view all the answers

<p>€18.00 (C)</p> Signup and view all the answers

<p>€25.00 (A)</p> Signup and view all the answers

<p>€9,323 (A)</p> Signup and view all the answers

<p>Trade receivables from customers (B)</p> Signup and view all the answers

<p>€320,000 (B)</p> Signup and view all the answers

<p>An expense and a cash payment (D)</p> Signup and view all the answers

<p>All profit levels including net profit are affected (D)</p> Signup and view all the answers

<p>€360,000 (C)</p> Signup and view all the answers

<p>EBIT and net profit increased by €25,000 (C)</p> Signup and view all the answers

<p>It reflects total equity after dividends are paid (A)</p> Signup and view all the answers

<p>Sales revenue (D)</p> Signup and view all the answers

<p>€290,000 (C)</p> Signup and view all the answers

<p>The statement of cash flows reflects inventories purchased within a period. (A)</p> Signup and view all the answers

<p>€140,000 (B)</p> Signup and view all the answers

<p>Cost Accounting (B)</p> Signup and view all the answers

<p>Higher profit margins (B)</p> Signup and view all the answers

<p>Sales revenue minus cost of goods sold (A)</p> Signup and view all the answers

<p>Statement of Cash Flows (D)</p> Signup and view all the answers

<p>Increased equity (B)</p> Signup and view all the answers

<p>Cash flows from financing activities (A)</p> Signup and view all the answers

<p>A variable cost (B)</p> Signup and view all the answers

<p>43% (A)</p> Signup and view all the answers

<p>184 t-shirts (D)</p> Signup and view all the answers

<p>€3,000 (A)</p> Signup and view all the answers

<p>Profit decreases as fixed costs increase (A)</p> Signup and view all the answers

<p>37% (A)</p> Signup and view all the answers

<p>18,000 (D)</p> Signup and view all the answers

<p>1 minute and 50 seconds (B)</p> Signup and view all the answers

<p>Both statements are correct (C)</p> Signup and view all the answers

<p>€60,000 (C)</p> Signup and view all the answers

<p>Reducing rent expenses (A)</p> Signup and view all the answers

<p>50 hours (B)</p> Signup and view all the answers

<p>Recorded as cash flows from operating activities (C)</p> Signup and view all the answers

<p>The standard cost price changes as well (B)</p> Signup and view all the answers

<p>Net profit affects the movement in Equity. (A)</p> Signup and view all the answers

<p>8 hours (D)</p> Signup and view all the answers

<p>€60,000 (D)</p> Signup and view all the answers

<p>Approx. 185 (A)</p> Signup and view all the answers

<p>Net profit can increase without a corresponding increase in cash flow. (A)</p> Signup and view all the answers

<p>Increases liabilities, does not affect cash flow. (C)</p> Signup and view all the answers

<p>Supplier A is €1,842.22 cheaper. (D)</p> Signup and view all the answers

<p>€6.00 (C)</p> Signup and view all the answers

<p>10 barrels (D)</p> Signup and view all the answers

<p>4 cents per minute (B)</p> Signup and view all the answers

<p>240 glasses (C)</p> Signup and view all the answers

<p>€70 (A)</p> Signup and view all the answers

<p>Cathedral carpark is more expensive. (D)</p> Signup and view all the answers

<p>€9.90 (D)</p> Signup and view all the answers

The portion of an asset's cost that is expensed over its useful life. It's calculated as (cost - salvage value) / useful life.

Total revenue generated from sales, including both cash and credit sales.

A goal to decrease costs associated with running a business, like rent or supplies.

A purchase of inventory not paid for immediately, creating an account payable.

Section of the statement of cash flow that reflects cash inflows and outflows directly related to running the business—such as inventory purchases.

Net profit directly impacts the equity. Net profit increases equity, and a loss decreases equity.

Net profit does NOT directly impact the cash balance at the bank; cash flows from operational activities impact it instead.

Methods of decreasing business expenses.

The amount of depreciation expense recognized for an asset each year, calculated by dividing the difference between the cost of an asset and its residual value by its useful life.

The net book value of non-current assets; calculated by subtracting accumulated depreciation from the original cost of the assets.

Cash taken out of a company by an owner or entrepreneur for personal use. It is not a business expense.

Amounts owed to suppliers for goods or services purchased on credit.

A financial statement that summarizes the cash inflows and outflows of a company over a period of time.

The systematic allocation of the cost of a tangible asset over its useful life.

Long-term assets, used in business operations and expected to provide benefits for more than one year.

The cash inflows and outflows related to the company's financing, including equity and debt.

A resource owned by a company that has future economic value.

Amounts owed to a company by its customers for goods or services sold on credit.

The direct costs of producing or acquiring goods sold by a company.

The owners' stake in a company; the residual interest in the assets after deducting liabilities.

The difference between revenue and all expenses after deducting all costs.

Profit of a company before deducting interest expense and income taxes.

A measure of the profitability of a company, calculated before deducting interest, taxes, depreciation, and amortization.

A measure of a company's profitability before deducting interest, taxes, depreciation, and amortization.

An increase in inventory purchases directly affects the cost of goods sold, which decreases the gross profit, EBITDA, EBIT, and net profit.

The percentage of revenue remaining after deducting the cost of goods sold. It represents the profitability of each sale.

A financial statement that shows a company's assets, liabilities, and equity at a specific point in time. It's like a snapshot of the company's financial health.

Goods held for sale in the ordinary course of business. This includes raw materials, work-in-progress, and finished goods.

The acquisition of goods or services for resale or use in a business.

The costs associated with running and operating a business, including rent, utilities, salaries, and marketing expenses.

The total amount of money earned from selling goods or services. It includes both cash sales and sales on credit.

This section of the statement of cash flows includes cash transactions related to how a company raises funds. Think of it as the 'money in' and 'money out' associated with debt, equity, and dividends.

The point where total revenue equals total costs. At this point, the company is neither making a profit nor incurring a loss.

The difference between actual or expected sales and the break-even point. It indicates how much sales can decline before the company starts losing money.

Costs that change in direct proportion to the level of production or sales. As you sell more, these costs go up; as you sell less, they go down.

Costs that remain constant regardless of the level of production or sales. These costs are incurred even if no products are sold.

The level of risk associated with a company's fixed costs. Companies with high fixed costs are more sensitive to changes in sales volume.

A technique used to determine the level of sales needed to cover all costs and reach a point of zero profit.

To break even, the total revenue from t-shirt sales must equal the fixed costs plus the variable costs of selling each t-shirt.

The percentage of a stadium's capacity that is used during a specific period, calculated by dividing the total number of visits by the stadium's capacity and multiplying by 100.

When a theme park deliberately builds in more capacity than they expect to need to handle peak demand or unexpected surges in visitors.

When a theme park has more capacity than needed due to factors beyond their control, like a decrease in visitor numbers.

To increase the capacity of a ride, you can add more wagons or increase the number of seats per wagon.

A tax imposed by a country on goods imported from other countries.

The value of one currency relative to another currency.

The total cost of equipment from Supplier 1, including the cost of the equipment, delivery costs, and import duty.

The total cost of equipment from Supplier 2, including the cost of the equipment, delivery costs, and import duty.

The cost of tiling a floor can be calculated by finding the area of the floor, subtracting any areas not needing tiles, adding a 10% waste allowance, and then multiplying by the price per square meter.

The extra material needed during a project like tiling, representing possible mistakes, cuts, and unused parts.

The estimated cost is found by calculating the total area of tiles needed, including wastage, and multiplying it by the price per square meter.

To make more cookies, all the ingredients in a recipe must be increased proportionally.

The total cost of all supplies needed for a project, like baking cookies, involves calculating the cost of each ingredient based on the quantities used.

Buying ingredients in larger quantities can sometimes be cheaper even if you only need a small portion for your recipe.

The cost of each ingredient depends on how much you need for your recipe and the price per unit.

The total cost of baking cookies includes the cost of all ingredients and any additional costs like packaging.

The price per click of your advertisement, which may vary depending on the number of clicks received. The price is tiered, meaning the first 500 clicks are the most expensive, and the price decreases for subsequent clicks.

To calculate the total cost of an advertising campaign, you need to consider the cost per click and the expected number of clicks. Multiply the number of clicks in each tier by their corresponding cost, then add the results.

A train ticket price with a discount applied. The discount is calculated based on the original ticket price, excluding any additional supplements.

The discount percentage is calculated by dividing the amount discounted by the original price and multiplying by 100%. This tells you the proportion of the original price saved.

To compare the hourly wages for different jobs, you need to account for the different workweeks involved. You can calculate the equivalent hourly wage for each job based on the monthly salary and the number of working hours.

The effective tax rate on a gift is calculated by dividing the total tax paid by the total amount of the gift. This takes into account any tax-free portions and reflects the actual percentage taxed.

A portion of a gift that is exempt from taxation. It's a fixed amount regardless of the total gift value.

To find the total tax payable on a gift, subtract the tax-free portion from the total gift amount, then multiply the remaining amount by the tax rate.

A method of depreciation that allocates the cost of an asset evenly over its useful life.

The value of an asset on a company's balance sheet, calculated by deducting accumulated depreciation from its original cost.

The total amount owed to suppliers at a specific point in time.

When an entrepreneur or owner takes money out of their company for personal use.

Net profit (profit after expenses) directly impacts equity. A higher net profit increases equity, while a loss decreases equity.

Net profit does NOT directly impact the cash balance at the bank. Cash flows from operational activities impact the cash balance.

The depreciation charge is calculated by subtracting the residual value from the cost of the asset and dividing the result by the asset's useful life.

The amount of extra revenue needed to increase profits by a specific amount.

The amount of money customers owe a company for goods or services sold on credit. It is calculated by adding the beginning balance to credit sales and subtracting cash received from customers.

The profit a company makes from selling its goods or services, calculated by subtracting the cost of goods sold from sales revenue.

When a company buys inventory using cash, it decreases the cash but increases the inventory, resulting in no net change to total current assets.

The cost of new inventory purchased can be calculated by adding the cost of goods sold to the ending inventory balance and subtracting the beginning inventory balance.

Rent expenses, being a cost of running the business, are classified as operating expenses on the income statement.

The first-year repayment of a straight-line loan includes the interest expense for the year and a portion of the principal.

The value of trade receivables at the end of the year represents the outstanding balance owed by customers for goods or services sold on credit.

Moon Ltd's gross profit represents the profit made from selling goods or services, calculated by subtracting the cost of goods sold from the sales revenue.

The price per click of an ad varies based on the number of clicks received. Higher tiers (e.g., first 500 clicks) have a higher cost per click than lower tiers.

The total cost of an advertising campaign considering the cost per click and the expected number of clicks. Calculate the cost for each tier and add them up.

A reduced price on a train ticket, calculated as a percentage of the original ticket price (excluding supplements).

The percentage of the original price that is saved with a discount. Calculate by dividing the discount amount by the original price then multiplying by 100%.

The hourly rate that would result in the same monthly salary, considering different workweek lengths for different jobs.

The actual percentage of a gift taxed after taking into account tax-free portions and any exemptions.

The amount of tax owed on a gift, calculated by subtracting the tax-free portion from the gift value and multiplying by the tax rate.

The cost of sales is calculated as the beginning inventory plus purchases minus the ending inventory. It represents the direct costs of producing or acquiring the goods sold.

Inventory turnover measures how efficiently a company is selling its inventory. It's calculated by dividing the cost of goods sold by the average inventory.

Depreciation expense is the systematic allocation of the cost of a tangible asset (like equipment or buildings) over its useful life. It represents the gradual decrease in the asset's value.

The portion of an asset's cost allocated as an expense each year, reflecting the asset's wear and tear over its useful life.

An amount of money owed to a company by its customers for goods or services sold on credit.

The owners' stake in a company, representing their share of the company's assets after deducting liabilities.

An asset with a useful life of more than one year, used in the business to generate revenue.

The direct costs associated with producing or acquiring the goods a company sells.

Earnings Before Interest and Taxes; a measure of a company's operating profit.

Equity increases when a company makes a profit or receives additional investment from its owners.

Increasing inventory purchases directly increases the cost of goods sold, which reduces the gross profit, EBITDA, EBIT, and net profit.

The systematic allocation of the cost of an asset over its useful life, representing its gradual wear and tear.

The number of units a company needs to sell to cover its fixed costs and break even. Calculated by dividing total fixed costs by the contribution margin per unit.

This type of cost is known as a variable cost. It fluctuates directly with the level of activity, meaning it increases when production goes up and decreases when production goes down.

A cost structure with a relatively high proportion of variable costs is less risky. This is because costs are directly tied to activity, making them more manageable during sales fluctuations.

The planned cost of producing a good or service, based on expected costs and usage. It's a benchmark for comparison.

Unexpected repairs or upkeep that happen outside of planned maintenance schedules.

Having more resources (space, personnel, equipment) available than needed at current demand.

The actual time spent on a ride, excluding the time spent boarding and disembarking.

The maximum number of visitors a ride or attraction can accommodate per unit of time.

An advertising model where advertisers pay a fee each time a user clicks on their ad.

The estimated amount of electricity and gas a business will use over a year.

The supplier offering the lowest total cost for electricity and gas based on expected consumption.

Finding the cheapest parking option based on the duration of parking and the different pricing schemes.

Determining the minimum number of beer barrels needed for an event based on expected sales, spillage, and glass size.

Calculating the total cost of an online advertisement campaign based on a pay-per-click model and the number of clicks.

Calculating the tax payable on a gift based on its value, any tax-free portions, and the tax rate.