Unit 3: Financial Management & Accounting
Business & Finance · Unit 3 · Paper 3

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 1Paper 2Paper 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 3” 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
1

Budget variance

2

Internal controls

3

Accounts receivable and days sales outstanding

4

Current ratio

5

Contribution margin

6

The three core financial statements

7

Retained earnings

8

EBITDA and what it hides

9

Fixed vs variable costs

10

Return on equity

11

Net profit margin

12

Operating profit (EBIT)

Short answer 1. Define or explain: Audit

3 pts

Short answer 2. Define or explain: Balance sheet

3 pts

Short answer 3. Define or explain: Profit vs cash flow

3 pts

Short answer 4. Define or explain: Financial leverage

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.