CBP CBP Business Finance and Accounting

Question 1

Which financial statement shows a company's revenues and expenses over a specific period?

Accepted Answer

Income Statement

Answer

Balance Sheet

Answer

Cash Flow Statement

Answer

Statement of Retained Earnings

Question 2

What does the term 'accounts payable' refer to in business accounting?

Accepted Answer

Money the company owes to suppliers or vendors

Answer

Money owed to the company by customers

Answer

Employee salaries that have been paid

Answer

Long-term debt obligations

Question 3

What is the formula for calculating gross profit?

Accepted Answer

Revenue minus cost of goods sold

Answer

Revenue minus operating expenses

Answer

Net income plus taxes

Answer

Total assets minus total liabilities

Question 4

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

Accepted Answer

Quick ratio

Answer

Debt-to-equity ratio

Answer

Current ratio

Answer

Return on equity

Question 5

What is 'depreciation' in the context of business accounting?

Accepted Answer

The allocation of an asset's cost over its useful life

Answer

An increase in the value of an asset over time

Answer

A one-time write-off of bad debt

Answer

A tax penalty for late filings

Question 6

A company has total assets of $500,000 and total liabilities of $200,000. What is the owner's equity?

Accepted Answer

$300,000

Answer

$700,000

Answer

$200,000

Answer

$500,000