SS3 Third Term Financial Account Past Questions And Answers

SS3 Financial Account questions with options and answers:

 

Question: What does the term “conservatism” mean in financial accounting?

 

A) Reporting assets at their current market value

B) Reporting liabilities at their historical cost

C) Recognizing losses and expenses sooner rather than later

D) Recognizing gains and revenues sooner rather than later

Answer: C) Recognizing losses and expenses sooner rather than later

 

Question: Under which category on the balance sheet would you find prepaid expenses?

 

A) Current assets

B) Non-current assets

C) Current liabilities

D) Non-current liabilities

Answer: A) Current assets

 

Question: What is the purpose of the DuPont Analysis in financial analysis?

 

A) To measure a company’s overall profitability

B) To assess the company’s short-term liquidity

C) To evaluate the return on equity by breaking it down into components

D) To calculate the company’s debt levels

Answer: C) To evaluate the return on equity by breaking it down into components

 

Question: Under which category on the cash flow statement would you find the payment of dividends to shareholders?

 

A) Operating activities

B) Investing activities

C) Financing activities

D) Non-operating activities

Answer: C) Financing activities

 

Question: What is the purpose of the Economic Order Quantity (EOQ) in inventory management?

 

A) To minimize ordering costs

B) To maximize carrying costs

C) To increase stockouts

D) To complicate supply chain processes

Answer: A) To minimize ordering costs

 

Question: Under which financial statement category would you find common stock dividends?

 

A) Operating activities

B) Investing activities

C) Financing activities

D) Non-operating activities

Answer: C) Financing activities

 

Question: What is the primary purpose of the Securities and Exchange Commission (SEC) in the context of financial reporting?

 

A) To set accounting standards

B) To regulate international trade

C) To enforce tax regulations

D) To oversee and regulate securities markets

Answer: D) To oversee and regulate securities markets

 

Question: Under which category on the cash flow statement would you find the purchase of treasury stock?

 

A) Operating activities

B) Investing activities

C) Financing activities

D) Non-operating activities

Answer: C) Financing activities

 

Question: What is the purpose of the Return on Investment (ROI) ratio in financial analysis?

 

A) To assess a company’s overall profitability

B) To evaluate the efficiency of inventory management

C) To measure the profitability of an investment relative to its cost

D) To determine the return on equity

Answer: C) To measure the profitability of an investment relative to its cost

 

Question: Under which category on the income statement would you find non-operating income?

 

A) Operating activities

B) Investing activities

C) Other income and expenses

D) Non-operating activities

Answer: C) Other income and expenses

 

Question: What is the purpose of the Cost of Goods Sold (COGS) on the income statement?

 

A) To calculate net income

B) To summarize revenue and expenses

C) To show the company’s financial position

D) To represent the direct costs of producing goods sold by a company

Answer: D) To represent the direct costs of producing goods sold by a company

 

Question: Under which financial statement category would you find the issuance of common stock?

 

A) Operating activities

B) Investing activities

C) Financing activities

D) Non-operating activities

Answer: C) Financing activities

 

Question: What is the purpose of the Efficiency Ratio in financial analysis?

 

A) To assess a company’s overall profitability

B) To evaluate the company’s debt levels

C) To measure how efficiently a company utilizes its assets

D) To calculate the return on equity

Answer: C) To measure how efficiently a company utilizes its assets

 

Question: Under which category on the cash flow statement would you find the repayment of long-term debt?

 

A) Operating activities

B) Investing activities

C) Financing activities

D) Non-operating activities

Answer: C) Financing activities

 

Question: What is the purpose of the Acid-Test Ratio (Quick Ratio) in financial analysis?

 

A) To measure a company’s overall profitability

B) To assess the company’s short-term liquidity

C) To evaluate the company’s debt levels

D) To calculate the return on equity

Answer: B) To assess the company’s short