NAB Exam Study Guide - Domain 2 –
Operations Questions And Answers
Current Asset -
correct answer ✅cash of other assets that will be converted into
cash or consumed within one year.
Long-lived assets (capital assets) -
correct answer ✅buildings, land, equipment, etc. Used on a long-
term basis
Tangible Assets -
correct answer ✅those assets that can be appraised by value or
seen or touched. buildings, equipment, etc. depreciable.
Intangible Assets -
correct answer ✅noncurrent, nonphysical assets such as
leaseholds, goodwill, copyrights, patents
Book Value -
correct answer ✅Cost of a depreciable asset less accumulated
depression
Bookkeeping -
correct answer ✅initial recording of business transactions - usually
done by a clerk
,NAB Exam Study Guide - Domain 2 –
Operations Questions And Answers
Investment capital -
correct answer ✅refers to the cash used to purchase real estate
and equipment and to construct the buildings in which the business
operates
Working capital -
correct answer ✅the excess of current assets over current
liabilities. facilities ability to meet its obligations
Net profit -
correct answer ✅equal revenues - expenses
Dividends -
correct answer ✅earnings distributed to stockholders
Retained Earnings -
correct answer ✅accumulated net earnings less dividends
distributed to stockholders
Gross Income -
correct answer ✅Amount of money earned before taxes
, NAB Exam Study Guide - Domain 2 –
Operations Questions And Answers
Liabilities -
correct answer ✅debts or obligations owed. ex: notes, accounts
payable, taxes, etc.
Liquidity -
correct answer ✅how quickly an asset can be converted into cash
without appreciable loss
Net worth -
correct answer ✅total assets -total liabilities
Sole proprietorship -
correct answer ✅A business owned by one person
Partnership -
correct answer ✅a business owned by two or more people
Corporation -
correct answer ✅form of business owned by a few persons or
thousands of people
Operations Questions And Answers
Current Asset -
correct answer ✅cash of other assets that will be converted into
cash or consumed within one year.
Long-lived assets (capital assets) -
correct answer ✅buildings, land, equipment, etc. Used on a long-
term basis
Tangible Assets -
correct answer ✅those assets that can be appraised by value or
seen or touched. buildings, equipment, etc. depreciable.
Intangible Assets -
correct answer ✅noncurrent, nonphysical assets such as
leaseholds, goodwill, copyrights, patents
Book Value -
correct answer ✅Cost of a depreciable asset less accumulated
depression
Bookkeeping -
correct answer ✅initial recording of business transactions - usually
done by a clerk
,NAB Exam Study Guide - Domain 2 –
Operations Questions And Answers
Investment capital -
correct answer ✅refers to the cash used to purchase real estate
and equipment and to construct the buildings in which the business
operates
Working capital -
correct answer ✅the excess of current assets over current
liabilities. facilities ability to meet its obligations
Net profit -
correct answer ✅equal revenues - expenses
Dividends -
correct answer ✅earnings distributed to stockholders
Retained Earnings -
correct answer ✅accumulated net earnings less dividends
distributed to stockholders
Gross Income -
correct answer ✅Amount of money earned before taxes
, NAB Exam Study Guide - Domain 2 –
Operations Questions And Answers
Liabilities -
correct answer ✅debts or obligations owed. ex: notes, accounts
payable, taxes, etc.
Liquidity -
correct answer ✅how quickly an asset can be converted into cash
without appreciable loss
Net worth -
correct answer ✅total assets -total liabilities
Sole proprietorship -
correct answer ✅A business owned by one person
Partnership -
correct answer ✅a business owned by two or more people
Corporation -
correct answer ✅form of business owned by a few persons or
thousands of people
