FINANCIAL ACCOUNTING FOR MBAS CERTIFICATION EVALUATION VERIFIED QUESTIONS WITH COMPLETE SOLUTIONS

FINANCIAL ACCOUNTING FOR MBAS
CERTIFICATION EVALUATION VERIFIED
QUESTIONS WITH COMPLETE SOLUTIONS

●● Revenues
Answer: Sales generated by the company.


●● Expenses
Answer: Costs incurred by the company.


●● Net Income
Answer: Net Income (or Loss) = Revenues - Expenses.


●● Balance Sheet
Answer: Provides a snapshot of a company's financial position at a
specific point in time.


●● Assets
Answer: What the company owns.


●● Liabilities
Answer: What the company owes.

,●● Owner's Equity
Answer: Owner's residual interest in the company.


●● Cash Flow Statement
Answer: Shows cash inflows and outflows over a period.


●● Operating Activities
Answer: Cash flows from the core business operations.


●● Investing Activities
Answer: Cash flows related to the purchase and sale of assets.


●● Financing Activities
Answer: Cash flows related to borrowing and repaying debt.


●● Statement of Retained Earnings
Answer: Shows changes in retained earnings over time.


●● Contribution Margin
Answer: The amount remaining from sales revenue after deducting
variable costs.

, ●● Contribution Margin Formula
Answer: Contribution Margin = Sales - Variable Costs.


●● Contribution Margin Ratio
Answer: (Contribution Margin / Sales).


●● Total Contribution Margin
Answer: Total CM = Total Sales Revenue - Total Variable Costs.


●● Breakeven Analysis
Answer: Determines when a business will start to make a profit (i.e.,
when total revenue = total costs).


●● Breakeven Point in Units
Answer: Breakeven Point in Units = Fixed Costs / Contribution Margin
per Unit.


●● 2016 Walgreens CFO Issue
Answer: Involved a major financial reporting controversy with former
CFO Wade Miquelon.


●● Material Misstatements