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5 Written questions

5 Matching questions

  1. operating expenses
  2. tests of overall performance
  3. Retained earnings
  4. internal benchmarking
  5. tests of efficiency
  1. a measures how efficiently assets are used- making the maximum use of available assets (accounts receivable collection period, inventory turnover, asset turnover)
  2. b costs that business incurs to make sales or earn revenue (salaries, rent, utilities)
  3. c profits (or losses) that the business has made during its years of operation and that have been left in the business (profits increase this/losses decrease)
  4. d comparison of the present year's ratios with those fo rpast years identifies trends, it indicates whether the pharmacy's financial performance is improving or deteriorating
  5. e indicate how effectively funds available to the manager have been used-ROA and ROE

5 Multiple choice questions

  1. revenues are recognized in the period during which goods are delivered and services rendered (used by pharmacies)
  2. ratios of other pharmacies of the same type and with similar financial resources, many professional organizations provide financial info and ratios through periodic surveys of their membership (but problems arise when pharmacies differ in Rx volume, location, and accounting)
  3. cash, accounts receivable, inventories, prepaid expenses, and short term investments
  4. Can th efirm pay its shrot-term debts as they come due
  5. difference between gross margin, and expenses for a specific period of time

5 True/False questions

  1. ROA (NI/total assets)Ratio measures how effectively all funds availableto the manager, both debt and equity, have been used. better indicator of manager's performance than ROE bc it considers all funds at teh manager's disposal, not just investements

          

  2. dividendswht you give back to owners

          

  3. statement of retained earningsprofits (or losses) that the business has made during its years of operation and that have been left in the business (profits increase this/losses decrease)

          

  4. 3.0%refers to coin, currency, and other items like personal checks, charge card receipts, and traveler's checks which banks accept for deposit

          

  5. accounts payable period(accounts payable/purchases per day)indicates how long it takesthe pharmacy to pay its credit purchases need 2 balance sheets- one for beginning inventory, one for end (COGS=BI+P+EI), digest says 22.4 days

          

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