Financial Management

Question 1

What are the three financial statements?

Answer 1

Income statement
Balance sheet
Cash flow statement

Question 2

The art and science of gathering, collecting, classifying, summarizing, and closing entries or reports of a financial statement.

Answer 2

Accounting

Question 3

The accounting system

Answer 3

People make decisions
⬇️
Business transaction occur
⬇️
Prepare reports to show the results of business operations

Question 4

It is the analysis and interpretation of bookkeeping records

Answer 4

Accounting

Question 5

Apart from revealing the level of performance, it throws light on the causes of weakness and deviation from plans.

Answer 5

Accounting

Question 6

May use accounting information to manage their routine affairs like operating and managing their bank accounts to evaluate the worthwhileness of a job in an organization, to invest money, to rent a house, etc.

Answer 6

Individuals

Question 7

They set goals, evaluate progress, and initiate corrective action in case of unfavorable deviation from the plan course of action.

Answer 7

Business managers

Question 8

The ability of the company to pay for the short term by selling assets

Ease of converting it to cash

Short term ability to pay

Answer 8

Liquidity
Liquid Assets

Question 9

Stability of the company for long-term loans

Ability of the company to meet its long-term debts and other financial obligations

One measure of a companies financial health because it demonstrates the ability to manage operation into the foreseeable future

Answer 9

Solvency

Question 10

They are keen to evaluate the profitability and solvency of a company before they decide to provide money to the organization

Answer 10

Investors and creditors

Question 11

They are charged with the responsibility of guiding the socioeconomic system of a country in such a way that it promotes the common good

Answer 11

Government and regulatory agencies

Question 12

It is the language of financial decisions

Answer 12

Accounting

Question 13

Two branches of assets

Answer 13

Current assets and fixed assets

Question 14

This is any property owned by the company that can be consumed so converted to cash in a period of 12 months or during the accounting period

Answer 14

Current assets

Question 15

Assets owned by the company that cannot be sold converted to cash during the accounting period.

Answer 15

Fixed Assets

Question 16

Examples of fixed assets

Answer 16

Land
Building
Equipment
Intangibles like patent copyright and trademark

Question 17

Examples of current assets

Answer 17

Account cash
Accounts receivable

Question 18

Two types of accounting period

Answer 18

Calendar year
Fiscal year

Question 19

Payables that can be paid or settle during the accounting period or 12 months

Answer 19

Current liabilities

Question 20

Payables beyond 12 months

Answer 20

Long-term liabilities

Question 21

Equity two branches

Answer 21

Income and expenses

Question 22

Anything of use in the future operations of the enterprise and belonging to the enterprise

Answer 22

Assets

Question 23

In a broader sense, the term refers to total claims against the enterprise

Answer 23

Equity

Question 24

Equity is also known

Answer 24

Capital

Question 25

Equity can be further divided into two categories

Answer 25

Owners claim - capital Outsiders claim- liability

Question 26

Formula for equity or capital

Answer 26

Assets - liability = equity

Question 27

The **excess of assets over liabilities** of the enterprise. It is the difference between the total assets and the total liabilities of the enterprise.

Answer 27

Capital

Question 28

Amount owed by the enterprise to the outsiders

Answer 28

Liability

Question 29

Monetary value of the product of services sold to the customers during the period. It results from sales, services, and sources like interest, dividend, and commission.

Answer 29

Revenue

Question 30

**Expenditure** incurred by the enterprise to earn revenue.

Answer 30

Expense or cost

Question 31

It is the amount deducted from the equity

Answer 31

Expenditure

Question 32

Money or value of goods belonging to the business used by the proprietor for his personal use

Answer 32

Drawings

Question 33

The person who invested his money or moneys worth, and bears the risk of the business

Answer 33

Owner

Question 34

A **person from whom amounts are due** for good sold or services rendered or in respect of a contractual obligation It is also known as debtor, trade debtor, accounts receivable.

Answer 34

Sundry debtors

Question 35

It is an **amount owed** by the enterprise on account of goods purchased or services rendered or in respect of contractual obligations

Answer 35

Sundry creditors