MGRADES
MFT for MBA UPDATED ACTUAL Exam
Questions and CORRECT Answers
Acid Test Ratio - CORRECT ANSWER - The ratio of current assets And current liabilities
also called quick ratio. The ratio equals the sum of a company's cash, short term investments, and
accounts receivable divided by its current liabilities. This ratio shows how well of business is
able to cover it short term obligations.
A quick ratio of one means - CORRECT ANSWER - The most liquid assets of a business
or equal to its total deaths in the business will just manage to repay all his debts by using its cash,
marketable securities, and accounts receivable.
A quick ratio of more than one means - CORRECT ANSWER - Indicates that the most
liquid assets of a business exceed its total debts.
Action centered leader ship - CORRECT ANSWER - Represents three key balanced
activities achieving the task building and maintaining the team and developing the individual
Activity-based costing (ABC) - CORRECT ANSWER - An accounting system that
recognizes a business firms relationship between costs, activities, and products, and through this
relationship assigns indirect costs to products less arbitrarily than traditional methods
Actual Cash Value - CORRECT ANSWER - replacement cost - depreciation
A quick ratio of less than one means - CORRECT ANSWER - Indicates that a business
would not be able to repay all its debts by using its most liquid assets
Economic Entity - CORRECT ANSWER - the recorded activities of a business entity
should be kept separate from the recorded activities of its owner(s) and any other business
entities.
, MGRADES
Going Concern Assumption - CORRECT ANSWER - financial statements are prepared
with the expectation that a business will remain in operation indefinitely
Monetary Unit Assumption - CORRECT ANSWER - requires that only those things that
can be expressed in money are included in the accounting records
Periodicity Assumption - CORRECT ANSWER - an organization can report its financial
results within certain designated periods of time.
Historical Cost Principle - CORRECT ANSWER - An accounting principle that states that
companies should record assets at their cost.
Revenue Recognition Principle - CORRECT ANSWER - The principle that companies
recognize revenue in the accounting period in which the performance obligation is satisfied.
Matching Principle - CORRECT ANSWER - recognize expenses in the same period as the
revenues they help to generate
Full Disclosure Principle - CORRECT ANSWER - Accounting principle that dictates that
companies disclose circumstances and events that make a difference to financial statement users.
cost-benefit constraint - CORRECT ANSWER - The notion that the benefit of a disclosure
exceeds the cost of that disclosure.
Materiality Constraint - CORRECT ANSWER - prescribes that only information that
would influence the decisions of a reasonable person need be disclosed
Industry Practices - CORRECT ANSWER - accounting issues that are unique to a specific
industry, and which are used instead of normal accounting practices and reporting.
MFT for MBA UPDATED ACTUAL Exam
Questions and CORRECT Answers
Acid Test Ratio - CORRECT ANSWER - The ratio of current assets And current liabilities
also called quick ratio. The ratio equals the sum of a company's cash, short term investments, and
accounts receivable divided by its current liabilities. This ratio shows how well of business is
able to cover it short term obligations.
A quick ratio of one means - CORRECT ANSWER - The most liquid assets of a business
or equal to its total deaths in the business will just manage to repay all his debts by using its cash,
marketable securities, and accounts receivable.
A quick ratio of more than one means - CORRECT ANSWER - Indicates that the most
liquid assets of a business exceed its total debts.
Action centered leader ship - CORRECT ANSWER - Represents three key balanced
activities achieving the task building and maintaining the team and developing the individual
Activity-based costing (ABC) - CORRECT ANSWER - An accounting system that
recognizes a business firms relationship between costs, activities, and products, and through this
relationship assigns indirect costs to products less arbitrarily than traditional methods
Actual Cash Value - CORRECT ANSWER - replacement cost - depreciation
A quick ratio of less than one means - CORRECT ANSWER - Indicates that a business
would not be able to repay all its debts by using its most liquid assets
Economic Entity - CORRECT ANSWER - the recorded activities of a business entity
should be kept separate from the recorded activities of its owner(s) and any other business
entities.
, MGRADES
Going Concern Assumption - CORRECT ANSWER - financial statements are prepared
with the expectation that a business will remain in operation indefinitely
Monetary Unit Assumption - CORRECT ANSWER - requires that only those things that
can be expressed in money are included in the accounting records
Periodicity Assumption - CORRECT ANSWER - an organization can report its financial
results within certain designated periods of time.
Historical Cost Principle - CORRECT ANSWER - An accounting principle that states that
companies should record assets at their cost.
Revenue Recognition Principle - CORRECT ANSWER - The principle that companies
recognize revenue in the accounting period in which the performance obligation is satisfied.
Matching Principle - CORRECT ANSWER - recognize expenses in the same period as the
revenues they help to generate
Full Disclosure Principle - CORRECT ANSWER - Accounting principle that dictates that
companies disclose circumstances and events that make a difference to financial statement users.
cost-benefit constraint - CORRECT ANSWER - The notion that the benefit of a disclosure
exceeds the cost of that disclosure.
Materiality Constraint - CORRECT ANSWER - prescribes that only information that
would influence the decisions of a reasonable person need be disclosed
Industry Practices - CORRECT ANSWER - accounting issues that are unique to a specific
industry, and which are used instead of normal accounting practices and reporting.
