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5 Written questions

5 Matching questions

  1. current or short-term payable
  2. Merchandise inventory
  3. solvency tests
  4. accounts payable
  5. statement of capital
  1. a Statement of retained earnings which provides info on how the owner's investment in the business has changed over some period of time
  2. b debts that arise from purchase of goods or services on credit
  3. c debts evidenced by formal, signed agreements called promissory notes
  4. d consistes of goods that the pharmacy has purchased for resale (otc and rx drugs, cosmetics)
  5. e measures a business's ability to pay its long term debt payments- debt to equity- NCPA =66%, lenders prefer low debt-equity ratios: either debt/equity or liabilities/equity (financial leverage)

5 Multiple choice questions

  1. profit-loss statement which provides PAST performance of the business
  2. tells the percent of every dollar of sales that is available to cover operating expenses and profit (23.2% NCPA digest)
  3. difference between revenues and COGS
  4. measures how efficiently the pharmacies total assets are used: Sales/total assets, high is desirable NCPA digest 5.09
  5. cash, accounts receivable, inventories, prepaid expenses, and short term investments

5 True/False questions

  1. Accounts recievable collection periodavg number of days it takes the pharmacy to collect an account receivable: accounts receivable/net credit sales per day, no greater than 1.5 times the firm's credit terms, ncpa digest is 16.6 days

          

  2. 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)

          

  3. Balance sheetsstatement of financial position/provides present financial status of the business

          

  4. Generic fill 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. tests of profitability, tests of overall performance, liquidity, solvency, tests of efficiencyindicate how effectively funds available to the manager have been used-ROA and ROE