MICHIGAN BUILDERS LICENSE LATEST CORE MAIN
QUESTIONS AND ANSWERS SURE A+
✔✔What are books of final entry? - ✔✔Ledgers
✔✔Where are all transactions from journals recorded? - ✔✔in the ledgers
✔✔What make up general ledgers? - ✔✔T-accounts
✔✔What must be balanced in order for the accounting equation to be in balance? -
✔✔ledgers
✔✔How many financial statements are there? - ✔✔4
✔✔What are the financial statements? - ✔✔income, owner's equity, balance, cash flow
✔✔What shows net profit or loss? - ✔✔income statement
✔✔What shows the capital paid in, draws, and investments? - ✔✔statement of owner's
equity
✔✔What shows assets, liabilities, and equity? - ✔✔balance sheet
✔✔What shows where the cash went - for bank statements? - ✔✔statement of cash
flow
✔✔What is a measure of liquidity to pay current bills? - ✔✔Current ratio
✔✔How do you calculate current ratio? - ✔✔Current assets/current liabilities
✔✔What is a good current ratio? - ✔✔2:1
✔✔What indicates the ability to pay current debts? - ✔✔quick asset ratio
✔✔What is a good quick asset ratio? - ✔✔1:1
✔✔What is usually used to determine a loan request? - ✔✔quick asset ratio
✔✔Quick asset ratios do not include ______. - ✔✔inventory
✔✔How do you calculate fixed assets-net worth ratio? - ✔✔fixed assets/net worth
✔✔How do you calculate net worth? - ✔✔total assets-liabilities
, ✔✔How do you calculate gross profit-sales ratio? - ✔✔net sales/sales
✔✔How do you calculate net sales? - ✔✔sales-direct sales expenses
✔✔What percentage of fixed assets-net worth ratio puts a company at risk for not
having enough money for emergencies? - ✔✔75%
✔✔What tells a company they can reduce their sales price by 50% before incurring a
loss? - ✔✔.5 gross profit-sales ratio
✔✔How do you calculate gross margin ratio (profit margin)? - ✔✔gross profit/net sales
✔✔How do you calculate gross profit? - ✔✔net sales-cost of goods sold
✔✔What formula is used to calculate the true value of an investment after inflation? -
✔✔true investment yield (real rate of return)
✔✔How do you calculate true investment yield? - ✔✔rate of return-inflation rate
✔✔What type of depreciation equally reduces the value the same amount every year? -
✔✔Straight line
✔✔What financial statement shows the company's profit or loss? - ✔✔Income
statement
✔✔Both federal and state forms are filed ___. - ✔✔quarterly
✔✔What is a combination of the social security tax rate and medicare tax rate? -
✔✔FICA
✔✔What is the social security tax rate? - ✔✔6.2%
✔✔What is the medicare tax rate? - ✔✔1.42
✔✔What form is used to indicate a payment made to a subcontractor (not employee) for
the previous year? - ✔✔1099
✔✔A business must pay Michigan corporate income tax if their gross receipts amount to
_______ or more. - ✔✔350,000
✔✔The contractor must give the 1099 to the subcontractor no later than ______. -
✔✔January 31st
QUESTIONS AND ANSWERS SURE A+
✔✔What are books of final entry? - ✔✔Ledgers
✔✔Where are all transactions from journals recorded? - ✔✔in the ledgers
✔✔What make up general ledgers? - ✔✔T-accounts
✔✔What must be balanced in order for the accounting equation to be in balance? -
✔✔ledgers
✔✔How many financial statements are there? - ✔✔4
✔✔What are the financial statements? - ✔✔income, owner's equity, balance, cash flow
✔✔What shows net profit or loss? - ✔✔income statement
✔✔What shows the capital paid in, draws, and investments? - ✔✔statement of owner's
equity
✔✔What shows assets, liabilities, and equity? - ✔✔balance sheet
✔✔What shows where the cash went - for bank statements? - ✔✔statement of cash
flow
✔✔What is a measure of liquidity to pay current bills? - ✔✔Current ratio
✔✔How do you calculate current ratio? - ✔✔Current assets/current liabilities
✔✔What is a good current ratio? - ✔✔2:1
✔✔What indicates the ability to pay current debts? - ✔✔quick asset ratio
✔✔What is a good quick asset ratio? - ✔✔1:1
✔✔What is usually used to determine a loan request? - ✔✔quick asset ratio
✔✔Quick asset ratios do not include ______. - ✔✔inventory
✔✔How do you calculate fixed assets-net worth ratio? - ✔✔fixed assets/net worth
✔✔How do you calculate net worth? - ✔✔total assets-liabilities
, ✔✔How do you calculate gross profit-sales ratio? - ✔✔net sales/sales
✔✔How do you calculate net sales? - ✔✔sales-direct sales expenses
✔✔What percentage of fixed assets-net worth ratio puts a company at risk for not
having enough money for emergencies? - ✔✔75%
✔✔What tells a company they can reduce their sales price by 50% before incurring a
loss? - ✔✔.5 gross profit-sales ratio
✔✔How do you calculate gross margin ratio (profit margin)? - ✔✔gross profit/net sales
✔✔How do you calculate gross profit? - ✔✔net sales-cost of goods sold
✔✔What formula is used to calculate the true value of an investment after inflation? -
✔✔true investment yield (real rate of return)
✔✔How do you calculate true investment yield? - ✔✔rate of return-inflation rate
✔✔What type of depreciation equally reduces the value the same amount every year? -
✔✔Straight line
✔✔What financial statement shows the company's profit or loss? - ✔✔Income
statement
✔✔Both federal and state forms are filed ___. - ✔✔quarterly
✔✔What is a combination of the social security tax rate and medicare tax rate? -
✔✔FICA
✔✔What is the social security tax rate? - ✔✔6.2%
✔✔What is the medicare tax rate? - ✔✔1.42
✔✔What form is used to indicate a payment made to a subcontractor (not employee) for
the previous year? - ✔✔1099
✔✔A business must pay Michigan corporate income tax if their gross receipts amount to
_______ or more. - ✔✔350,000
✔✔The contractor must give the 1099 to the subcontractor no later than ______. -
✔✔January 31st
