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1. A balance sheet records a company's
A) cash inflows and outflows.
B) profit or loss for the year.
C) NET financial position.
D) budget versus actual variances.
2. Joe should advise the Board that if the IT department is to fulfil its role within the company, it must do what?
A) Maintain legacy systems without replacement
B) Operate independently from business units
C) Focus exclusively on reducing IT costs
D) Make a proactive contribution to the development of business strategy
3. An insurance company uses the double-entry accounting principle for recording insurance transactions to reflect that it has
A) created a new liability that reduces equity.
B) revalued its fixed assets.
C) earned an amount of income which is balanced by an increase in cash.
D) paid a claim and reduced its asset base.
4. What information must be used to calculate the return on equity?
A) Operating costs and investment income
B) Total assets and total liabilities
C) Gross written premium and net income
D) Profit after tax and capital
5. How will a recent acquisition of the subsidiary be shown on the insurer's cash flow statement?
A) As a financing inflow.
B) It is not shown on the cash flow statement.
C) As an operational income.
D) As a cash outflow from investment activities.
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: D | Question # 3 Answer: C | Question # 4 Answer: D | Question # 5 Answer: D |
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