C201 Business Acumen Exam 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
_____. - ✅✅income statement
The _____ was created by the Sarbanes-Oxley Act of 2002. - ✅✅Public Accounting Oversight Board
Which of the following financial statements shows a company's financial position on a particular date? -
✅✅Balance sheet
Expenses that have been incurred (such as wages) but have yet to be paid are reported on the balance
sheet as _____. - ✅✅accruals
What are some examples of non-cash expenses? - ✅✅Income taxes, operating costs, cost of goods
sold
Which of the following current assets is NOT included when calculating the acid-test ratio? -
✅✅inventory
If a firm has a current ratio of 2.5, it means that for every $2.50 in _____ it has $1.00 in _____. -
✅✅current assets; current liabilities
_____ ratios are designed to evaluate a firm's ability to generate revenues in excess of operating costs
and other expenses. - ✅✅Profitability
All of the following are profitability ratios - ✅✅net profit margin
gross profit margin
, return on equity
What was established in 1973 to promote worldwide consistency in financial reporting practices? -
✅✅The International Accounting Standards Committee (IASC)
Why do we avoid an over-reliance on borrowing? - ✅✅to gain leverage
Households, businesses, government, financial institutions, and financial markets together form what is
known as the - ✅✅financial system
What are 3 money market instruments? - ✅✅Treasury bills, commercial paper, and bank certificates
of deposit.
What are 3 types of bonds? - ✅✅Municipal bonds, Corporate bonds, mortgage pass-through security
Types of securities - ✅✅Money Market Instruments, bonds and stock
Money market instruments are - ✅✅short-term debt securities issued by governments, financial
institutions, and corporations.
The basic form of corporate ownership is embodied in _____. - ✅✅common stock
Tom just bought a bond from United Pet Group. This bond is only backed by the financial reputation of
the company. What type of bond did Tom buy? - ✅✅Debenture
An owner of which form of stock would receive dividend payments first? - ✅✅Preferred stock
The _____ is a collection of financial markets in which previously issued securities are traded among
investors. - ✅✅Secondary market
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
_____. - ✅✅income statement
The _____ was created by the Sarbanes-Oxley Act of 2002. - ✅✅Public Accounting Oversight Board
Which of the following financial statements shows a company's financial position on a particular date? -
✅✅Balance sheet
Expenses that have been incurred (such as wages) but have yet to be paid are reported on the balance
sheet as _____. - ✅✅accruals
What are some examples of non-cash expenses? - ✅✅Income taxes, operating costs, cost of goods
sold
Which of the following current assets is NOT included when calculating the acid-test ratio? -
✅✅inventory
If a firm has a current ratio of 2.5, it means that for every $2.50 in _____ it has $1.00 in _____. -
✅✅current assets; current liabilities
_____ ratios are designed to evaluate a firm's ability to generate revenues in excess of operating costs
and other expenses. - ✅✅Profitability
All of the following are profitability ratios - ✅✅net profit margin
gross profit margin
, return on equity
What was established in 1973 to promote worldwide consistency in financial reporting practices? -
✅✅The International Accounting Standards Committee (IASC)
Why do we avoid an over-reliance on borrowing? - ✅✅to gain leverage
Households, businesses, government, financial institutions, and financial markets together form what is
known as the - ✅✅financial system
What are 3 money market instruments? - ✅✅Treasury bills, commercial paper, and bank certificates
of deposit.
What are 3 types of bonds? - ✅✅Municipal bonds, Corporate bonds, mortgage pass-through security
Types of securities - ✅✅Money Market Instruments, bonds and stock
Money market instruments are - ✅✅short-term debt securities issued by governments, financial
institutions, and corporations.
The basic form of corporate ownership is embodied in _____. - ✅✅common stock
Tom just bought a bond from United Pet Group. This bond is only backed by the financial reputation of
the company. What type of bond did Tom buy? - ✅✅Debenture
An owner of which form of stock would receive dividend payments first? - ✅✅Preferred stock
The _____ is a collection of financial markets in which previously issued securities are traded among
investors. - ✅✅Secondary market
