Fundamentals of Business Administration Exam
Materials
Course Introduction
Fundamentals of Business Administration provides a comprehensive introduction to the core principles and practices that underpin the modern business environment. This course covers essential topics such as organizational structure, business ethics, management functions, marketing, finance, human resources, and strategic planning. Students will develop an understanding of the roles and responsibilities of administrators, learn how businesses operate in various industries, and explore the dynamic external factors that influence decision-making. Emphasizing both theory and practical applications, the course prepares students with foundational knowledge and skills necessary for further study or entry-level positions in the field of business administration.
Recommended Textbook
Financial Accounting 4th Canadian Edition by Robert; Libby
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13 Chapters
1686 Verified Questions
1686 Flashcards
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Page 2
Chapter 1: Financial Statements and Business Decisions
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119 Verified Questions
119 Flashcards
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Sample Questions
Q1) In accounting and reporting for a business entity,the accounting and reporting for the business must be kept separate from other economic affairs of its owners.
A)True
B)False
Answer: True
Q2) Why is the auditor's role in performing audits important to our society?
A)auditors provide direct financial advice to potential investors.
B)auditors have the primary responsibility for the information contained in financial statements.
C)auditors issue reports on the accuracy of each financial transaction.
D)an audit of financial statements helps investors and others to know that they can rely on the information presented in the financial statements.
Answer: D
Q3) The organization for which financial data are to be collected and reported is called an accounting entity.
A)True
B)False
Answer: True
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3
Chapter 2: Investing and Financing Decisions and the Accounting System
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) If Golden Company owed Eye Company $500,where would Golden Company reflect this?
A)Statement of financial position.
B)Income statement.
C)Statement of cash flows
D)Statement of changes in equity.
Answer: A
Q2) On the income statement,assets should always equal liabilities plus shareholders' equity.
A)True
B)False
Answer: False
Q3) The debt-to-equity ratio is computed by taking which of the following?
A)Total assets divided by total liabilities.
B)Average total assets divided by average total liabilities.
C)Total liabilities divided by total shareholders' equity.
D)Total assets divided by total shareholders' equity.
Answer: C
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Chapter 3: Operating Decisions and the Accounting System
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) According to the periodicity assumption,to measure and report financial information periodically,we assume the long life of the company can be cut into shorter periods.
A)True
B)False
Answer: True
Q2) The category that is generally considered to be the best measure of a company's ability to continue as a going concern is
A)cash flows from investing activities.
B)cash flows from operating activities.
C)cash flows from financing activities.
D)usually different from year to year.
Answer: B
Q3) A high total asset turnover signifies efficient management of assets; a low asset turnover ratio signifies less efficient management.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Adjustments,financial Statements,and the Quality of Earnings
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127 Verified Questions
127 Flashcards
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Sample Questions
Q1) On July 1,20A,Bill Company signed a two-year $8,000 note payable with 9 percent interest.At due date,July 1,20C,the principal and interest will be paid in full.Interest expense should be reported on the income statement for the year ended December 31,20A,in the amount of which of the following?
A)$360.
B)$420.
C)$720.
D)$1,440.
Q2) A trial balance prepared after the closing entries have been posted would exclude which one of the following accounts?
A)Inventory.
B)Trade receivables.
C)Accumulated depreciation.
D)Service revenue.
Q3) Earnings per share (EPS)amounts must be reported on the statement of financial position of corporations.
A)True
B)False
Q4) Is the adjusted trial balance a financial statement? Explain why or why not.
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Chapter 5: Communicating and Interpreting Accounting Information
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108 Verified Questions
108 Flashcards
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Sample Questions
Q1) To prepare a statement of cash flows (indirect method),which of the following items should be added back to profit to derive "cash flow from operating activities"?
A)Depreciation expense.
B)Increase in trade receivables.
C)Gain on a sale of equipment.
D)Decrease in trade payables.
Q2) ABC Company reported total sales revenue of $80,000 and total expenses of $72,000 for the year ended December 31,20X.During 20X,trade receivables increased by $3,000,merchandise inventory decreased by $2,000,trade payables increased by $1,000,and $5,000 in depreciation expense was recorded.Assuming no other adjustments to profit are needed,what was the net cash inflow from operating activities?
A)$10,000.
B)$11,000.
C)$13,000.
D)$19,000.
Q3) Cash collected from customers is a cash flow from a financing activity.
A)True
B)False
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Chapter 6: Reporting and Interpreting Sales Revenue, receivables,
and Cash
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135 Verified Questions
135 Flashcards
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Sample Questions
Q1) Virginia Equipment,Inc.,sold and issued 4,000 shares for $20 per share on January 1,20B.On the same day,the company purchased a piece of land valued at $30,000 and a building valued at $80,000.The building will be used for 40 years and has a zero estimated salvage (residual)value.The company uses straight-line depreciation.
Required:
Prepare the general journal entries to record the share issue and the purchase of the land and building on January 1 and the depreciation expense on December 31,20B.
Q2) Which of the following statements is true?
A)Accumulated depreciation is a contra account in the income statement.
B)The current ratio is current assets divided by current liabilities.
C)Retained earnings is the accumulated profit plus the accumulated dividends paid.
D)Book value of a building is the cost less the current year's depreciation.
Q3) Which of the following would most likely increase net profit margin?
A)Decreasing selling price
B)Increasing sales volume
C)Increasing expenses
D)Decreasing sales volume
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Page 8
Chapter 7: Reporting and Interpreting Cost of Goods Sold and Inventory
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161 Verified Questions
161 Flashcards
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Sample Questions
Q1) In recording the year-end adjusting entry for bad debt expense,a company would do which of the following?
A)debit trade receivables.
B)credit trade receivables.
C)credit allowance for doubtful accounts.
D)debit allowance for doubtful accounts.
Q2) When preparing the monthly bank reconciliation,the accountant for Teddy Trucks discovered that a cheque correctly written to one of Teddy's suppliers for $159 had been incorrectly recorded in the books as $195.To correct the error,the accountant prepared an adjusting entry which required a debit to which of the following accounts?
A)Cash.
B)Bad debt expense.
C)Accounts receivable.
D)Purchases.
Q3) Receivables turnover is computed as net credit sales divided by average net trade receivables.
A)True
B)False
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Chapter 8: Reporting and Interpreting Property, plant, and Equipment; Intangibles; and Natural Resources
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142 Verified Questions
142 Flashcards
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Sample Questions
Q1) Ownership of goods passes from the seller to the buyer after the buyer has paid for the goods.
A)True
B)False
Q2) Richmond Company had the following information taken from its 20A adjusted trial balance: Sales,$200,000; Sales Discounts,$4,000; Beginning Inventory,$10,000; and Purchases,$140,000.A physical count of the merchandise on hand at the end of the year showed $20,000.Compute the gross margin (gross profit)that would appear in the income statement.
A)$62,000
B)$66,000
C)$70,000
D)$74,000
Q3) In order to determine cost of goods sold in a periodic inventory system we
A)subtract ending inventory from beginning inventory.
B)subtract ending inventory from cost of goods available for sale.
C)subtract purchases from ending inventory.
D)add purchases to beginning inventory.
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Chapter 9: Reporting and Interpreting Liabilities
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152 Verified Questions
152 Flashcards
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Sample Questions
Q1) Bethany Company plans to depreciate a new building using declining-balance depreciation with a 200 percent acceleration rate.The building cost $400,000.The estimated residual value of the building is $50,000 and it has an expected useful life of 25 years.Assuming the first year's depreciation expense was recorded properly,what would be the amount of depreciation expense for the second year?
A)$15,360
B)$16,000
C)$29,440
D)$32,000
Q2) Because of depreciation,the net carrying amount of an asset declines over time and profit is reduced by the amount of the expense.
A)True
B)False
Q3) If a second-hand machine is purchased for operational use in a business,all renovation and repair costs on the used machine incurred by the purchaser prior to its operational use should be excluded from the cost of the asset.
A)True
B)False
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Chapter 10: Reporting and Interpreting Bond Securities
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111 Verified Questions
111 Flashcards
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Sample Questions
Q1) Bison Corp.issues a 5 year 8%,$60,000 note payable on March 1.The terms of the note include monthly blended principal and interest payments of $1,217.The entry to record the second instalment payment will show a:
A)debit to Notes Payable of $822.
B)debit to Cash for $1,217.
C)debit to Interest Expense for $400.
D)credit to Interest Expense for $395.
Q2) A Co,a biotechnology company,reported cost of goods sold of $345.2 million and trade payables of $121.6 million for 2012.In 2011,cost of goods sold was $300.8 million and trade payable was $103.9 million.What was A Co's trade payables turnover ratio in 2012?
A)2.84
B)2.86
C)2.90
D)3.06
Q3) The two primary factors management considers in determining the business's capital structure is level of risk and the rate of return.
A)True
B)False
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Page 12
Chapter 11: Reporting and Interpreting Stockholders Equity
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161 Verified Questions
161 Flashcards
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Sample Questions
Q1) If bonds have been issued at a discount,then over the life of the bonds the
A)carrying amount of the bonds will decrease.
B)carrying amount of the bonds will increase.
C)interest expense will decrease.
D)unamortized discount will increase.
Q2) A bond sold at a discount will pay total cash payments for interest that is more than the total interest expense recognized over the period the bond is issued.
A)True
B)False
Q3) In 2012,H Co's times interest earned ratio was 2.51 while T Co's ratio for that year was .80.Which of the following statements is false?
A)H Co's ratio appears to provide adequate coverage of interest from its present profit.
B)Since H Co's is actively pursuing growth through investment in other companies,its ratio may improve once those investments begin to generate additional profit.
C)T Co's ratio is very low and they present high risk to their creditors and investors.
D)None of the responses is false.
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Chapter 12: Statement of Cash Flows
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136 Verified Questions
136 Flashcards
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Sample Questions
Q1) A stock dividend results in
A)the same ownership interest.
B)greater ownership interest.
C)less ownership interest.
D)increased total assets.
Q2) Which of the following statements is false?
A)Most provinces do not require shares to have a par value.
B)Many provinces permit issuance of no-par value shares.
C)Legal capital represents the permanent amount of capital that owners cannot withdraw as long as the corporation exists.
D)Par value shares are increasingly issued by corporations in Canada.
Q3) Accounting entries associated with a cash dividend usually are made on which of the following dates?
A)Record date and payment date.
B)Payment date only.
C)Declaration date and record date.
D)Declaration date and payment date.
Q4) Shares provide a number of benefits,including the receipt dividends.
A)True
B)False
Page 14
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Chapter 13: Analyzing Financial Statements
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124 Verified Questions
124 Flashcards
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Sample Questions
Q1) The average days' supply in inventory is computed by dividing the days in the year by the ending balance of inventory.
A)True
B)False
Q2) Long-term creditors are usually most interested in evaluating A)liquidity.
B)marketability.
C)profitability.
D)solvency.
Q3) A new company with a high property,plant,and equipment balance would most likely be which of the following?
A)A tee shirt company.
B)A hotel.
C)A pizza take-out company.
D)A hot dog vendor on an airport concourse.
Q4) Which of the following ratios is not a test of solvency?
A)Debt to equity ratio.
B)Owners' equity to total equity ratio.
C)Creditors' equity to total equity ratio.
D)Earnings per share ratio.
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