Company Accounts A-Level Business Quiz
Test your knowledge of Company Accounts with this quiz.
This quiz consists of 20 short answer questions. Scroll down to start the quiz!
Questions
What is depreciation?
The decrease in the value of fixed assets over time
What do balance sheets show?
The assets and liabilities of a company at a specific point in time
Which four groups of people are interested in profit and loss accounts?
Shareholders
Managers
Employees
HMRC revenue / government
How do you calculate retained profit?
Net profit – tax – dividends
What does a profit and loss account show?
A businesses revenues, expenses and profit / loss over a period of time
Name two short term external sources of finance
Debt factoring
Trade credit
Name two long term external sources of finance
Share capital
Mortgages
Debentures
Long term loans
What is the advantage of using retained profit as a source of finance?
Cheap – don’t have to pay any interest on it
What are two other internal sources of finance a business can use?
Sale and leaseback
Sale of assets
What is capital expenditure?
Spending on fixed assets
How do businesses control their working capital?
Stock and debtor control, management of their liquidity
State the equation for working capital
Working capital = current assets – current liabilities
In the short term which is most important for a firm cash flow or profit?
Cash Flow
True or false increasing prices is not a way of improving cash flow
False
State at least three causes of cash flow problems
Seasonal demand
Overtrading
Over investment in fixed assets
Credit sales
Poor stock management
Unforeseen changes
Why do businesses use cash flow forecasts?
Planning:
To anticipate potential shortages of cash
To examine and adjust the timings of receipts and expenditures
To arrange financial support
How do you calculate net cash flow?
Total incomes (receipts) – total outflows (expenditures)
What is a cash flow forecast?
A prediction of the cash inflows and outflows of a business over a period of time
What is revenue expenditure?
Spending that meets current day to day expenses
When a firm is “window dressing” what are they trying to do?
Improve the appearance of a company’s balance sheet
Category
