Financial Management & Accounting unit test

A test on this unit alone, marked as a percentage and a letter grade — for the test your class is actually sitting, rather than for May. Answer everything, then submit once: seeing the answer to question 3 before attempting question 4 makes the final percentage meaningless.

Paper 1 Paper 2 Paper 3

Each paper is built from this unit’s 30 terms and is the same for everyone, so a teacher can assign “Unit 3, Paper 1” and every student sits the identical test. Multiple choice is marked objectively; the written sections you mark yourself against the model answer and rubric.

Suggested time 34 min 31 points0/17 attempted

Accounts receivable and days sales outstanding

Accrual vs cash accounting

Current ratio

Debt-to-equity ratio

Gross profit and gross margin

Depreciation vs amortization

Profit vs cash flow

Return on equity

Net profit margin

EBITDA and what it hides

The three core financial statements

Quick ratio (acid test)

Short answer 1. Define or explain: Working capital

3 pts

Short answer 2. Define or explain: Internal controls

3 pts

Short answer 3. Define or explain: Matching principle

3 pts

Short answer 4. Define or explain: Retained earnings

3 pts

Free response

7 pts

Harborline Outfitters reports the following for the year just ended. Sales revenue $840,000. Cost of goods sold $504,000. Operating expenses $210,000. Interest expense $18,000. Income tax $27,000. On the balance sheet at year end: current assets $265,000 (of which inventory is $140,000), total assets $610,000, current liabilities $185,000, total liabilities $355,000.

Calculate gross profit and the gross profit margin.

Calculate net income and the net profit margin.

Calculate the current ratio and the quick ratio, and explain what the difference between them reveals about this company.

Calculate the debt-to-assets ratio and interpret it.

Calculate return on assets.

Explain one reason a company can be profitable and still fail.

Identify which financial statement each of the following appears on: sales revenue, inventory, and cash paid to suppliers.