Accountant in Business Flashcards
7 cards from real ACCA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Accountant in Business flashcards as text
Which financial statement shows a company's assets, liabilities, and equity at a specific point in time?
Answer: Statement of financial position
The statement of financial position (balance sheet) provides a snapshot of what a company owns and owes at a single date.
A company's current assets total $500,000 and current liabilities total $250,000. What is the current ratio?
Answer: 2.0
Current ratio = Current assets ÷ Current liabilities = $500,000 ÷ $250,000 = 2.0.
Which of the following best describes 'working capital'?
Answer: Current assets minus current liabilities
Working capital measures short-term liquidity as the difference between current assets and current liabilities.
Under the accruals (matching) concept, when should revenue be recognized?
Answer: When the goods or services are delivered/performed
The accruals concept requires revenue to be recognized when earned (goods/services delivered), not when cash changes hands.
Which of the following is classified as a non-current (fixed) asset?
Answer: A factory building owned by the company
Non-current assets are held for long-term use in the business, such as property, plant, and equipment.
Gross profit is calculated as:
Answer: Revenue minus cost of goods sold
Gross profit = Revenue − Cost of goods sold (COGS), representing profit before operating expenses.
A company has equity of $800,000 and total debt of $200,000. What is the debt-to-equity ratio?
Answer: 0.25
Debt-to-equity ratio = Total debt ÷ Equity = $200,000 ÷ $800,000 = 0.25.