ACCOUNTING & FINANCE EXAM WITH CORRECT SOLUTIONS #2
Ratio analysis - correct answer involves the methods of calculating and interpreting
financial ratios to analyse and monitor the companies performance.
Stock Turnover Ratio = - correct answer Cost of Sales/Average Stock
Current Ratio - correct answer Current Assets/ Current Liabilities
ROCE - correct answer Net Profit/Capital Employed
Net Profit - correct answer Net Profit/Sales Revenue
Gross Profit - correct answer Gross Profit/Sales Revenue
Break-Even is - correct answer Company goes from making a loss to making a profit.
Fixed Costs - correct answer Costs you pay even when no sales are made.
Vairable Costs - correct answer Costs which vary depending on output.
Total Cost (Break-even) - correct answer Fixed Cost + Vairable Cost
Creditors - correct answer Those to whom the firm owes money for goods or services it
has had but not yet paid for.
Debtors - correct answer People who owe your company money/
Shareholders - correct answer Those who own shares in a company or business.
ASSET - correct answer Anything owned that is of value and can be sold or otherwise
disposed of
Balance Sheet - correct answer a financial statement that reports assets, liabilities, and
owner's equity on a specific date
Profit and Loss - correct answer an account compiled at the end of an accounting period
to show gross and net profit or loss
Liability - correct answer a debt; something disadvantageous
Invoice - correct answer send an bill to
Credit note - correct answer provides information on goods which have been returned
by the buyer
Ratio analysis - correct answer involves the methods of calculating and interpreting
financial ratios to analyse and monitor the companies performance.
Stock Turnover Ratio = - correct answer Cost of Sales/Average Stock
Current Ratio - correct answer Current Assets/ Current Liabilities
ROCE - correct answer Net Profit/Capital Employed
Net Profit - correct answer Net Profit/Sales Revenue
Gross Profit - correct answer Gross Profit/Sales Revenue
Break-Even is - correct answer Company goes from making a loss to making a profit.
Fixed Costs - correct answer Costs you pay even when no sales are made.
Vairable Costs - correct answer Costs which vary depending on output.
Total Cost (Break-even) - correct answer Fixed Cost + Vairable Cost
Creditors - correct answer Those to whom the firm owes money for goods or services it
has had but not yet paid for.
Debtors - correct answer People who owe your company money/
Shareholders - correct answer Those who own shares in a company or business.
ASSET - correct answer Anything owned that is of value and can be sold or otherwise
disposed of
Balance Sheet - correct answer a financial statement that reports assets, liabilities, and
owner's equity on a specific date
Profit and Loss - correct answer an account compiled at the end of an accounting period
to show gross and net profit or loss
Liability - correct answer a debt; something disadvantageous
Invoice - correct answer send an bill to
Credit note - correct answer provides information on goods which have been returned
by the buyer
