Which of the following is false? a) Gearing = Long term Liabilities / Total Assets b) Acid ratio = (Current assets – inventory) : Current liabilities c) Inventory holding period = (Average inventory x 365 days) / (Sales revenue) d) Dividend per share = Dividend of the period / Number of issued ordinary shares
1. Which of the following is false?
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a) Gearing = Long term Liabilities / Total Assets
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b) Acid ratio = (Current assets – inventory) : Current liabilities
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c) Inventory holding period = (Average inventory x 365 days) / (Sales revenue)
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d) Dividend per share = Dividend of the period / Number of issued ordinary shares
3. Many businesses are set up as limited companies. These are owned by shareholders and run by the board of directors. Which of the following are disadvantages of limited company status?
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a) The impression of a soundly based business organisation (though incorporation does not guarantee reliability or respectability)
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b) Easier to raise capital
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c) Must comply with legal and regulatory requirements
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d) Shareholders’ liability for any losses is limited to the amount of their investment
in the company
4. Which of the following are characteristics of
a) Unregulated formats that allow both form and content to be determined by the management of a business
b) Production and publication are required by law
c) Users include government, suppliers and customers
d) Include both historic information and forward looking budgets
5. Which of the following is indicative of discounts received from a supplier on account of early settlement of an amount owed as a result of a credit purchase?
a) Quantity discount
b) Value discount
c) Early settlement discount
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