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Finance IQ Test
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Name
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Your answer
Your Email Address
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Your answer
WhatsApp Mobile No.
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Use country code. For eg. 91------
Your answer
What is the difference between revenue and profit?
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Revenue is the total income profit is what's left after expenses
Profit is the total income, revenue is what's left after expenses
They are the same thing
Revenue is calculated annually, profit monthly
Which financial statement shows a company's assets, liabilities, and equity?
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Income Statement
Cash Flow Statement
Balance Sheet
Profit and Loss Statement
What is the difference between a debit and a credit in accounting?
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Debits increase assets and decrease liabilities, credits do the opposite
Credits increase assets and decrease liabilities, debits do the opposite
Debits are only expenses, credits are only income
There is no difference
What is the primary purpose of bookkeeping?
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To impress investors
To confuse tax authorities
To track financial transactions and maintain accurate records
To make the business look profitable on paper
What is depreciation?
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The increase in value of an asset over time
The decrease in value of an asset over time
The cost of maintaining an asset
The profit made from selling an asset
What is the difference between gross profit and net profit?
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Gross profit is calculated after direct expenses, net profit after all expenses
Gross profit is the total revenue, net profit is what's left after expenses
There is no difference, they are the same thing
Gross profit is for goods, net profit is for services
What are accounts receivable?
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Money the business owes to suppliers
Money customers owe to the business
Cash the business has in the bank
The value of the business's inventory
What is the purpose of a profit and loss statement?
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To show the business's cash position
To list all the business's assets and liabilities
To show the business's revenues, costs, and expenses over a period of time
To track employee working hours
What is 'working capital'?
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The total value of a company's assets
The difference between current assets and current liabilities
The amount of cash a company has on hand
The total amount of money invested in a business
What is the difference between a secured and unsecured loan?
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Secured loans have lower interest rates
Unsecured loans require collateral
Secured loans require collateral
There is no difference
What is the break-even point?
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The point at which a business's debts equal its assets
The point at which total revenue equals total costs
The maximum amount of profit a business can make
The point at which a business must file for bankruptcy
What is EBITDA?
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Earnings Before Interest, Taxes, Depreciation, and Amortization
Estimated Business Income Tax and Debt Assessment
Effective Business Investment and Trade Development Analysis
Expected Balance in Total Debt Accumulation
What is the current ratio?
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The ratio of current year's profit to last year's profit
The ratio of current assets to current liabilities
The ratio of cash to total assets
The ratio of debt to equity
What does P/E ratio stand for in stock valuation?
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Profit to Earnings ratio
Price to Earnings ratio
Percentage of Equity ratio
Profit to Equity ratio
What is the concept of opportunity cost in finance?
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The cost of producing one more unit of a good
The benefit foregone by choosing one alternative over another
The cost of borrowing money
The cost of inflation
What does ROI stand for?
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Return on Investment
Rate of Inflation
Ratio of Income
Revenue Over Inventory
What is the debt-to-equity ratio?
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The ratio of a company's total debt to its total equity
The ratio of a company's profits to its debts
The ratio of a company's assets to its liabilities
The ratio of a company's short-term debt to its long-term debt
What is the working capital ratio?
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Current assets divided by current liabilities
Total assets divided by total liabilities
Current assets minus current liabilities
Net income divided by total assets
What is the difference between cash accounting and accrual accounting?
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Cash accounting is for small businesses, accrual for large ones
Cash accounting records transactions when cash changes hands, accrual when they're incurred
Cash accounting is for service businesses, accrual for product-based businesses
There is no difference, they are two terms for the same thing
What is inventory turnover?
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The process of replacing old inventory with new
The rate at which inventory is sold and replaced over a period
The profit made from selling inventory
The cost of storing inventory
What is the quick ratio?
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A measure of how quickly a company can pay its bills
The ratio of current assets (excluding inventory) to current liabilities
The speed at which a company can convert assets to cash
The ratio of cash to total assets
What is the difference between markup and margin?
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Markup is based on cost, margin is based on selling price
Markup is for products, margin is for services
Markup is the profit, margin is the revenue
There is no difference, they are the same thing
What is the purpose of a cash flow forecast?
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To predict future profits
To estimate future cash position and identify potential shortfalls
To determine the value of the business
To set prices for products or services
What is the difference between variable and fixed costs?
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Variable costs change with production levels, fixed costs don't
Variable costs are for products, fixed costs are for services
Variable costs are short-term, fixed costs are long-term
There is no difference, they are the same thing
What does NPV stand for in financial analysis?
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Net Present Value
New Product Valuation
Net Profit Variance
Nominal Price Variation
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