BUSINESS AND MANAGEMENT – FINANCE MANAGEMENT BUSINESS & LAW 2024 SERIES 5
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Course
Business and Management
Institution
Business And Management
Unlock the secrets to mastering financial management with our comprehensive collection of expertly crafted questions and answers! Designed specifically for business and management students, this document provides a detailed exploration of essential budgeting, financial tracking, and accounting conc...
BUSINESS MANAGEMENT – FINANCE MANAGEMENT BUSINESS & LAW 2024 SERIES 5
1.
Question: What term describes a list containing details about each customer, their purchases, the value
of items bought, and the amount owed for credit sales?
a) Accounts receivable
b) Accounts payable
c) Long-term assets
d) Cash records
Correct Answer: a) Accounts receivable
Explanation: The term "accounts receivable" refers to the detailed record of each customer's
purchases, the value of items bought, and the amount they owe from credit sales. This list represents
the money a company is owed for goods or services delivered but not yet paid for.
2.
Question: What term is used for the differences between actual performance and what was budgeted?
a) Discrepancies
b) Shortages
c) Overages
d) Windfalls
Correct Answer: a) Discrepancies
Explanation: "Discrepancies" are the differences between actual results and budgeted expectations.
This term indicates variances or inconsistencies in financial or operational metrics. "Shortages" and
"overages" denote deficits or surpluses, while "windfalls" refer to unexpected gains.
3.
Question: Which financial statement lists assets, liabilities, and owners' equity as of a specific date?
a) Balance sheet
b) Income statement
c) Asset records
d) Credit records
Correct Answer: a) Balance sheet
Explanation: The "balance sheet" provides a snapshot of a company's financial position by listing
assets, liabilities, and owners' equity at a particular date. It helps evaluate a company's financial health
and stability.
4.
Question: What records are used to track the decline in asset value due to usage or time?
a) Depreciation records
b) Inventory records
c) Tax records
d) Records of accounts
Correct Answer: a) Depreciation records
Explanation: "Depreciation records" track the reduction in asset value over time due to usage. These
records are essential for accurate financial reporting and expense allocation.
5.
Question: Which records are crucial to avoid legal issues due to inaccurate information?
a) Asset records
b) Depreciation records
c) Inventory records
d) Records of accounts
e) Cash records
f) Payroll records
g) Tax records
Correct Answer(s): f) Payroll records
g) Tax records
Explanation: "Payroll records" and "tax records" are critical for avoiding legal problems. Errors in
payroll can lead to disputes and penalties, while inaccuracies in tax records can result in audits and
fines. Accurate maintenance of these records is crucial for compliance.
6.
Question: What term is used for all income generated by a business over time?
a) Revenue
b) Assets
c) Expenses
d) Liabilities
Correct Answer: a) Revenue
Explanation: "Revenue" encompasses all income earned by a business from sales and other sources
over time. It is a key indicator of financial performance and overall business health.
7.
Question: What type of records identifies the type and quantity of products available for sale?
a) Inventory records
b) Asset records
c) Accounts receivable
d) Accounts payable
Correct Answer: a) Inventory records
Explanation: "Inventory records" detail the type and quantity of products available for sale. These
records are essential for managing stock levels and making informed purchasing decisions.
8.
Question: What records contain details about all employees, including their pay and benefits?
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