CBP CBP Business Finance and Accounting 3

Question 1

What is the purpose of a cash flow statement?

Accepted Answer

To track the inflow and outflow of cash over a period

Answer

A cash flow statement tracks all cash inflows and outflows from operating, investing, and financing activities over a reporting period.

Question 2

Which of the following is an example of a fixed cost?

Accepted Answer

Monthly office rent

Answer

Fixed costs like rent remain constant regardless of production volume, unlike variable costs that change with output levels.

Question 3

What is the difference between revenue and profit?

Accepted Answer

Revenue is total income; profit is what remains after expenses

Answer

Revenue is the total income generated before any deductions, while profit is the remainder after all costs and expenses have been subtracted from revenue.

Question 4

A business spends $10,000 on marketing and generates $40,000 in new sales from that campaign. What is the ROI?

Accepted Answer

300%

Answer

ROI = (Net Profit / Cost) × 100 = ($40,000 - $10,000) / $10,000 × 100 = 300%, meaning every dollar spent returned three dollars in profit.

Question 5

What does 'accounts receivable' represent on a company's balance sheet?

Accepted Answer

Money owed to the company by customers for goods or services delivered

Answer

Accounts receivable is a current asset representing amounts customers owe the company for products or services already delivered but not yet paid for.

(CBP) Certified Business Professional Practice Test

(CBP) Certified Business Professional Practice Test

CBP CBP Business Finance and Accounting 3