Robert Half Assessment Test Accounting 5

Question 1

A company borrows $10,000 from a bank on a 6-month, 8% note payable. How much interest will accrue over the 6-month term?

Accepted Answer

$400

Answer

Interest = Principal × Rate × Time = $10,000 × 8% × (6/12) = $400.

Question 2

Which of the following is classified as an operating activity on the statement of cash flows?

Accepted Answer

Collection of accounts receivable

Answer

Collecting accounts receivable is a cash inflow from operating activities because it relates to the company's primary revenue-generating operations.

Question 3

What does the term 'net realizable value' refer to in the context of inventory?

Accepted Answer

The estimated selling price minus costs to complete and sell

Answer

Net realizable value (NRV) is the estimated selling price in the ordinary course of business less the estimated costs of completion and selling.

Question 4

Which ratio measures a company's ability to pay interest on its outstanding debt?

Accepted Answer

Times interest earned ratio

Answer

Times Interest Earned = EBIT / Interest Expense, measuring how many times operating income covers interest obligations.

Question 5

Deferred revenue on the balance sheet represents:

Accepted Answer

Cash received for services not yet performed

Answer

Deferred revenue is a liability representing cash received from customers before the company has fulfilled its obligation to provide goods or services.

Robert Half Assessment Test Practice Test

Robert Half Assessment Test Practice Test

Robert Half Assessment Test Accounting 5