C201 Business Acumen Questions with
correct Answers
Frank, chief financial officer for a company, wants to take a look at the summary of expenses,
revenues, and profits of the firm for the most recent quarter. He can best find this information
by consulting the _____. - correct answer(s) ✔✔ income statement
The _____ was created by the Sarbanes-Oxley Act of 2002. - correct answer(s) ✔✔ Public
Accounting Oversight Board
Which of the following financial statements shows a company's financial position on a
particular date? - correct answer(s) ✔✔ Balance sheet
Expenses that have been incurred (such as wages) but have yet to be paid are reported on the
balance sheet as _____. - correct answer(s) ✔✔ accruals
What are some examples of non-cash expenses? - correct answer(s) ✔✔ Income taxes,
operating costs, cost of goods sold
Which of the following current assets is NOT included when calculating the acid-test ratio? -
correct answer(s) ✔✔ inventory
If a firm has a current ratio of 2.5, it means that for every $2.50 in _____ it has $1.00 in _____.
- correct answer(s) ✔✔ current assets; current liabilities
_____ ratios are designed to evaluate a firm's ability to generate revenues in excess of
operating costs and other expenses. - correct answer(s) ✔✔ Profitability
, All of the following are profitability ratios - correct answer(s) ✔✔ net profit margin
gross profit margin
return on equity
What was established in 1973 to promote worldwide consistency in financial reporting
practices? - correct answer(s) ✔✔ The International Accounting Standards Committee (IASC)
Why do we avoid an over-reliance on borrowing? - correct answer(s) ✔✔ to gain leverage
Households, businesses, government, financial institutions, and financial markets together
form what is known as the - correct answer(s) ✔✔ financial system
What are 3 money market instruments? - correct answer(s) ✔✔ Treasury bills, commercial
paper, and bank certificates of deposit.
What are 3 types of bonds? - correct answer(s) ✔✔ Municipal bonds, Corporate bonds,
mortgage pass-through security
Types of securities - correct answer(s) ✔✔ Money Market Instruments, bonds and stock
Money market instruments are - correct answer(s) ✔✔ short-term debt securities issued by
governments, financial institutions, and corporations.
correct Answers
Frank, chief financial officer for a company, wants to take a look at the summary of expenses,
revenues, and profits of the firm for the most recent quarter. He can best find this information
by consulting the _____. - correct answer(s) ✔✔ income statement
The _____ was created by the Sarbanes-Oxley Act of 2002. - correct answer(s) ✔✔ Public
Accounting Oversight Board
Which of the following financial statements shows a company's financial position on a
particular date? - correct answer(s) ✔✔ Balance sheet
Expenses that have been incurred (such as wages) but have yet to be paid are reported on the
balance sheet as _____. - correct answer(s) ✔✔ accruals
What are some examples of non-cash expenses? - correct answer(s) ✔✔ Income taxes,
operating costs, cost of goods sold
Which of the following current assets is NOT included when calculating the acid-test ratio? -
correct answer(s) ✔✔ inventory
If a firm has a current ratio of 2.5, it means that for every $2.50 in _____ it has $1.00 in _____.
- correct answer(s) ✔✔ current assets; current liabilities
_____ ratios are designed to evaluate a firm's ability to generate revenues in excess of
operating costs and other expenses. - correct answer(s) ✔✔ Profitability
, All of the following are profitability ratios - correct answer(s) ✔✔ net profit margin
gross profit margin
return on equity
What was established in 1973 to promote worldwide consistency in financial reporting
practices? - correct answer(s) ✔✔ The International Accounting Standards Committee (IASC)
Why do we avoid an over-reliance on borrowing? - correct answer(s) ✔✔ to gain leverage
Households, businesses, government, financial institutions, and financial markets together
form what is known as the - correct answer(s) ✔✔ financial system
What are 3 money market instruments? - correct answer(s) ✔✔ Treasury bills, commercial
paper, and bank certificates of deposit.
What are 3 types of bonds? - correct answer(s) ✔✔ Municipal bonds, Corporate bonds,
mortgage pass-through security
Types of securities - correct answer(s) ✔✔ Money Market Instruments, bonds and stock
Money market instruments are - correct answer(s) ✔✔ short-term debt securities issued by
governments, financial institutions, and corporations.
