Exams

Question 1

What are the 3 management activities and what accounting support is provided

Answer 1

Planning - budgets
OPerating - cost analysis
Evaluation - cost reports

Question 2

Parts of a business plan (5 parts)

Answer 2

1. Description of business plan
2. Marketing plan
3. Operating plan
4. Environmental/sustainability plan
5. Financial plan

Question 3

Sources of capital (3)

Answer 3

1. Grants
2. Short term capital
3. Long term capital

Question 4

Contribution margin

Answer 4

total sales rev - total variable costs

Question 5

Contribution margin per unit

Answer 5

rev per unit - variable cost per unit

Question 6

Profit (cont. marg.)

Answer 6

contribution margin - FC

Question 7

Conbtibution margin %

Answer 7

COntribution margin/total sales revenue

Question 8

What is included in the master budget (7)

Answer 8

Sales budget
Purchases budfet
Selling expenses budget (operating expenses budget for service business)
General admin/expenses budget
Cash budget + projected cash flow statement
Projected income statement
Projected balance sheet

Question 9

Cash budget (3 sections)

Answer 9

Cash flow from operating activities
Cash flow from investing activities
Cash flow from financing activities

Question 10

Historical cost concept

Answer 10

Business records its transactions based on dollars exchanged at the time REGARDLESS off whether the value has changed

Question 11

Entity concept

Answer 11

When business and owners are kept separate eg. in accounting system/records

Question 12

Process to prepare financial information (4 steps)

Answer 12

1. Identofy and measure the transactions
2. Record the transactions
3. REport the transactions
4. Analayse and interpret the transactions

Question 13

Expanded accounting equation

Answer 13

Assets = liabilities + owners capial + net income (Rev-exp)

Question 14

Going concern

Answer 14

Assumption that an entity is able to continue as a viable entity for the fprseeable future

Question 15

accrual accounting

Answer 15

Recordining revenue and expenses in the same accounting period that G/S are provided, regardless of when cash is rewceived/paid

Question 16

working capital

Answer 16

current assets - current liabilititesd

Question 17

bank reconciliation causes of difference (5)

Answer 17

1. Deposits in transit
2. Outstanding payments/cheques
3. Deposits made by bank
4. Charges made by bak
5. Errors

Question 18

Net sales

Answer 18

Initial reevenue - sales returns - allowances - discounts

Question 19

cost of goods sold

Answer 19

(beginning inventory cost + inventory ourchases) - cost of ending inventory

Question 20

Accounts included in income statement (4)

Answer 20

1. Rev
2. Exp.
3. Loss
4. AGain

Question 21

Profit margin

Answer 21

net income/net sales

Question 22

Gross profit margin

Answer 22

Gross profit/net sales

Question 23

net income

Answer 23

Sales revenue - expenses

Question 24

current ratio

Answer 24

current assets/current liabilities

Question 25

quick ratio

Answer 25

quick assets/current liabilities

Question 26

debt ratio

Answer 26

total liabilities/total assets

Question 27

return on total assets

Answer 27

net income + interest paid/average total assets

Question 28

return on OE

Answer 28

net income/average OE

Question 29

invetory turnover

Answer 29

COGS/average inventory

Question 30

accounts receivable turnover

Answer 30

net credit sales/average accounts receivable

Question 31

Sections of cash flow statement

Answer 31

1. Operating
2. Investing
3. Financing

Question 32

Operating cash flow margin

Answer 32

Net cash operating/net sales

Question 33

Cash return on total assets

Answer 33

Net cash operating + interest paid/ave. total assets

Question 34

Purose of business plan

Answer 34

1. Organuse
2. Benchmark
3. Assist in getting funding