FINANCIAL AND MANAGERIAL ACCOUNTING
FOR MBAS UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
◉ 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.
FOR MBAS UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS
◉ 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.
