Test Financial Planning

Knowledge Test

1. Which ratio is best used for measuring how well management did in managing the funds
provided by shareholders?
a. Profit Margin
b. Debt to Equity
c. Return on Equity
d.Inventory Turnover

2. An extremely high current ratio implies:
a. Management is not investing idle assets productively.
b. Current assets have been depleted and the company is insolvent.
c. Totalassets are earning a very low rate of return.
d. Current liabilities are higher than current assets.

3. The number of times we convert receivables into cash during the year is measured by:
a.Capital Turnover
b. Asset Turnover
c. Accounts Receivable Turnover
d. Return on Assets

4. In order for budgeting to really work, we must link the budgeting process with:
a. Financial Statements
b.Accounting Transactions
c. Strategic Planning
d. Operating Reports

5. The first forecast we will prepare for budgeting will be the:
a. Budgeted Income Statement
b. Sales Forecast
c. CashBudget
d. Budgeted Balance Sheet

6. Which of the following detail budgets will help us prepare the Budgeted Income
Statement?
a. Direct Labor Budget
b. Cash Budget
c. Budgeted Balance Sheet
d.Year End Balance Sheet

7. Which budget is prepared for determining how much external financing we will need to
support estimated sales?
a. Cash Budget
b. Budgeted Income Statement
c. BudgetedBalance Sheet
d. Sales Forecast

8. A good place to start in preparing the Budgeted Balance Sheet is with the main link
between the Income Statement and the Balance Sheet. This link is:
a. Cash
b.Retained Earnings
c. Current Assets
d. Long Term Liabilities


9. One way to improve the budgeting process is to include qualitative techniques into
forecasting. Which of the following is anexample of a qualitative technique?
a. 5 Year Trend Analysis
b. Ratio Analysis
c. Percent of Sales Method
d. Interviewing the President of the Company

10. Match characteristics of delphi...