CSLB TEST 2 BUSINESS FINANCE EXAM QUESTIONS
WITH DETAILED VERIFIED ANSWERS (100%
CORRECT ANSWERS) A+ GRADE ASSURED
All revenues minus all of the expenses refers to - CORRECT ANSWER --net profit
What can happen if payroll tax returns are not filed in a timely manner? - CORRECT ANSWER -
Large penalties can be charged for late filings. According to the California Franchise Tax Board, an under
payment penalty will be charged when taxes are not paidPby the due date. Interest will be charged on any
delinquent or late payment from the original due date of the return to the date paid. In addition, if other pe
nalties are not paid within 15 days of the date of the notice, interest will be charged from the date of the bi
lling notice until the date of payment. Interest compounds daily and the interest rate is adjusted twice a ye
ar.
The two types of external financing available to a business are - CORRECT ANSWER --
Equity funds and debt.Equity funds are supplied by investors who acquire some control of the business an
d a share of future profits. These funds remain in the business. Debt represents borrowed dollars that requ
ire both repayment of the original amount and periodic interest payments. The owner does not normally g
ive up control of thePbusiness.
WhichPof the following items is listed as a current asset on a balance sheet? - CORRECT
ANSWER - Accounts receivable
Contractors who work in sales and use tax districts in California and purchase fixtures or materials are su
bject to
what percentage of tax? - CORRECT ANSWER -
A certain percentage based on supplies used at the job site differs between tax districts
WhichPof the following items does accounts receivable include? - CORRECT
ANSWER - Money paid for labor and received forPservices
Another term for "stockholders equity'' on a balance sheet is - CORRECT ANSWER --Net worth
State unemployment insurance taxes are - CORRECT ANSWER --Paid by employers
, If a construction company buys a new car for general use by the sales staff, to which of the following acc
ounts would the depreciation of the car be charged? - CORRECT ANSWER -General and
administrative costs
How often must an employer report and pay social security (FICA) taxes? - CORRECT
ANSWER - Quarterly. Most employment taxes are due quarterly, unless a monthly deposit
schedule is met.
Which of the following shows how far past-due each customer's payment is? - CORRECT
ANSWER - Accounts receivable aging report
Sales tax is collected from customers and paid to the - CORRECT ANSWER --Board of Equalization
What is the difference between fixed cost and overhead cost? - CORRECT
ANSWER - Fixed costs fall under the overhead
An employer is required to file quarterly state tax returns with the - CORRECT ANSWER --
Employment Development Department. The keyword in this question is "employer," which automatically
implies employment taxes which are filed with the EmploymentPDevelopment Department
Which of the following statements best describes the difference between the balance sheet and income sta
tement? - CORRECT ANSWER -
The balance sheet shows net worth at a particular point in time, while the income statement shows profit e
arned over a period of time
WhichPof the following may appear under accounts receivable? - CORRECT ANSWER -
Retention. Retention is usually 10% which is withheld from the contract by the owner to ensure that the j
ob is done properly and subcontractors are paid
WhichPof the following is true aboutPoverhead? - CORRECT ANSWER -
All of the above: It includes advertising, bad debts, and storage charges, It consists of expenses necessary
to run a company, but not necessarily expenses incurred on the job site, It is important to include in bids
A company's profits are calculated by - CORRECT ANSWER -Subtracting expenses from revenues
Working capital is defined as - CORRECT ANSWER --Total current assets minus total currentPliabilities
WITH DETAILED VERIFIED ANSWERS (100%
CORRECT ANSWERS) A+ GRADE ASSURED
All revenues minus all of the expenses refers to - CORRECT ANSWER --net profit
What can happen if payroll tax returns are not filed in a timely manner? - CORRECT ANSWER -
Large penalties can be charged for late filings. According to the California Franchise Tax Board, an under
payment penalty will be charged when taxes are not paidPby the due date. Interest will be charged on any
delinquent or late payment from the original due date of the return to the date paid. In addition, if other pe
nalties are not paid within 15 days of the date of the notice, interest will be charged from the date of the bi
lling notice until the date of payment. Interest compounds daily and the interest rate is adjusted twice a ye
ar.
The two types of external financing available to a business are - CORRECT ANSWER --
Equity funds and debt.Equity funds are supplied by investors who acquire some control of the business an
d a share of future profits. These funds remain in the business. Debt represents borrowed dollars that requ
ire both repayment of the original amount and periodic interest payments. The owner does not normally g
ive up control of thePbusiness.
WhichPof the following items is listed as a current asset on a balance sheet? - CORRECT
ANSWER - Accounts receivable
Contractors who work in sales and use tax districts in California and purchase fixtures or materials are su
bject to
what percentage of tax? - CORRECT ANSWER -
A certain percentage based on supplies used at the job site differs between tax districts
WhichPof the following items does accounts receivable include? - CORRECT
ANSWER - Money paid for labor and received forPservices
Another term for "stockholders equity'' on a balance sheet is - CORRECT ANSWER --Net worth
State unemployment insurance taxes are - CORRECT ANSWER --Paid by employers
, If a construction company buys a new car for general use by the sales staff, to which of the following acc
ounts would the depreciation of the car be charged? - CORRECT ANSWER -General and
administrative costs
How often must an employer report and pay social security (FICA) taxes? - CORRECT
ANSWER - Quarterly. Most employment taxes are due quarterly, unless a monthly deposit
schedule is met.
Which of the following shows how far past-due each customer's payment is? - CORRECT
ANSWER - Accounts receivable aging report
Sales tax is collected from customers and paid to the - CORRECT ANSWER --Board of Equalization
What is the difference between fixed cost and overhead cost? - CORRECT
ANSWER - Fixed costs fall under the overhead
An employer is required to file quarterly state tax returns with the - CORRECT ANSWER --
Employment Development Department. The keyword in this question is "employer," which automatically
implies employment taxes which are filed with the EmploymentPDevelopment Department
Which of the following statements best describes the difference between the balance sheet and income sta
tement? - CORRECT ANSWER -
The balance sheet shows net worth at a particular point in time, while the income statement shows profit e
arned over a period of time
WhichPof the following may appear under accounts receivable? - CORRECT ANSWER -
Retention. Retention is usually 10% which is withheld from the contract by the owner to ensure that the j
ob is done properly and subcontractors are paid
WhichPof the following is true aboutPoverhead? - CORRECT ANSWER -
All of the above: It includes advertising, bad debts, and storage charges, It consists of expenses necessary
to run a company, but not necessarily expenses incurred on the job site, It is important to include in bids
A company's profits are calculated by - CORRECT ANSWER -Subtracting expenses from revenues
Working capital is defined as - CORRECT ANSWER --Total current assets minus total currentPliabilities
