Question 1

1.What is the primary objective of computing gross profit?

Accepted Answer

To assess the financial performance of the business

Answer

To impress investors

Answer

To determine the net profit margin

Answer

To calculate employee salaries

Question 2

What is Rodrigo's expected profit on the 10 boxes of perfumes?

Accepted Answer

P30,000.00

Answer

P15,000.00

Answer

P10,000.00

Answer

P12,000.00

Question 3

What does the gross profit rate measure?

Accepted Answer

The percentage of gross profit to sales

Answer

The amount of net profit

Answer

The operating expenses of the business

Answer

The total revenue of the business

Question 4

What does the operating profit margin represent?

Accepted Answer

The excess of gross profit over operating expenses

Answer

The net profit of the business

Answer

The total revenue of the businessThe cost of goods sold

Question 5

How much is the operating profit margin of XYZ Trading?

Accepted Answer

P67,000.00

Answer

P157,000.00

Answer

P90,000.00

Answer

P57,000.00

Question 6

What does the net profit margin measure?

Accepted Answer

The percentage of net profit to sales

Answer

The cost of goods sold

Answer

The total revenue of the business

Answer

The operating expenses of the business

Question 7

What is the net profit margin of XYZ Trading?

Accepted Answer

P46,900.00

Answer

P157,000.00

Answer

P20,000.00

Answer

P67,000.00

Question 8

What is the purpose of liquidity ratios?

Accepted Answer

To evaluate the short-term financial health of the business

Answer

To assess the profitability of the business

Answer

To calculate employee benefits

Answer

To measure the long-term financial stability of the business

Question 9

How is the current ratio calculated?

Accepted Answer

Current assets / Current liabilities

Answer

Total assets / Current assets

Answer

Total liabilities / Current liabilities

Answer

Current assets / Total assets

Question 10

What does the quick ratio exclude from its calculation?

Accepted Answer

Inventories

Answer

Total assets

Answer

Long-term liabilities

Answer

Current assets

Question 11

What does the return on investment (ROI) measure?

Accepted Answer

The amount of net income per peso invested in the business

Answer

The profitability of the business

Answer

The efficiency of the business in generating profits

Answer

The percentage of net profit to sales

Question 12

How is the ROI calculated?

Accepted Answer

Net income / Investment

Answer

Net income / Sales

Answer

Net income / Total assets

Answer

Net income / Equity

Question 13

How do changes in interest rates impact financial projections?

Accepted Answer

They affect borrowing costs and investment returns

Answer

They increase profitability

Answer

They don't have any impact

Answer

They lead to higher employee salaries

Question 14

What should entrepreneurs consider when projecting cash flow?

Accepted Answer

The timing of cash inflows and outflows

Answer

The number of pens on the desk

Answer

The color of the office walls

Answer

The taste of the coffee in the break room

Question 15

How do entrepreneurs calculate net profit?

Accepted Answer

By subtracting total expenses from total revenue

Answer

By adding total revenue to total expenses

Answer

By multiplying total revenue by total expenses

Answer

By dividing total expenses by total revenue

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