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5 Written questions

5 Matching questions

  1. tests of profitability
  2. current or short-term payable
  3. liabilities
  4. 2 ways of determining when expenses are recognized in the accrual system
  5. drug expense per patient day
  1. a Does business earn adequate profit
  2. b a)in the same accounting period as the associated revenue b)in period when associated good or service is used (b is for pharmacies)
  3. c debts evidenced by formal, signed agreements called promissory notes
  4. d total annual drug expense/annual patient days
  5. e what a business owes, business debts whihc arise from purchasing goods or services on credit or from borrowing money to finance the businesses operations (current and noncurrent)

5 Multiple choice questions

  1. 5 topics ratio analysis covers
  2. two sources that owners equity arises from
  3. sources abd uses statement or statement of changes in financial position: reflects cash changes during the operating cycle, shows how a pharmacy obtained cash and how it used cash
  4. debts that arise from purchase of goods or services on credit
  5. those that under nromal conditions are not sold, consumed or converted to cash within cycle (year)

5 True/False questions

  1. Asset turnovermeasures how efficiently the pharmacies total assets are used: Sales/total assets, high is desirable NCPA digest 5.09


  2. statement of capitalcash invested into the business by owners (common/capital stock)


  3. 3.0%refers to coin, currency, and other items like personal checks, charge card receipts, and traveler's checks which banks accept for deposit


  4. Current ratiocurrent assets/current liablilities: it measures the ability to pay bankers/wholesalers back on time, ideal number between 2-4 and NCPA digest is 2.89, above 4 =too much invested in current assets, and lower than=pharmacy has probs paying current debts on time


  5. 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


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