Business Certifications Business Certifications Financial Management & Budgeting 1

Question 1

What does ROI stand for in a business context?

Accepted Answer

Return on Investment

Answer

Rate of Interest

Answer

Revenue on Income

Answer

Return on Inventory

Question 2

Which financial statement reports a company's revenues, expenses, and profit over a specific period?

Accepted Answer

Income Statement

Answer

Balance Sheet

Answer

Cash Flow Statement

Answer

Statement of Equity

Question 3

A budget variance is best described as:

Accepted Answer

The difference between budgeted and actual amounts

Answer

The total budget allocated for a project

Answer

The forecasted revenue for the next quarter

Answer

The interest rate applied to outstanding debt

Question 4

What is zero-based budgeting?

Accepted Answer

A budget built from scratch each period, requiring justification for every expense

Answer

A budget where all income exactly equals all expenses

Answer

A budget that starts with last year's figures and adjusts upward

Answer

A budget that allocates zero funds to discretionary spending

Question 5

Which ratio measures a company's ability to pay its short-term obligations?

Accepted Answer

Current ratio

Answer

Debt-to-equity ratio

Answer

Price-to-earnings ratio

Answer

Gross margin ratio

Question 6

Capital expenditures (CapEx) refer to:

Accepted Answer

Funds used to acquire or upgrade long-term physical assets

Answer

Daily operating expenses such as salaries and utilities

Answer

Money spent on marketing campaigns and promotions

Answer

Short-term investments in inventory