Financial Management

Question 1 of 62

1

The (2) broad categories of accounting in the financial management of a firm are?

Select one or more of the following:

General Ledger Accounting
Project Cost Accounting
Basic Accounting
Double Entry Bookkeeping

Explanation

Question 2 of 62

1

Which of the following best describes General Ledger Accounting?

Select one of the following:

Is basic accounting that keeps track of money flowing into & out of the business & is needed for day-to-day operations, banking, taxes, & auditing; provides firm-wide statements about the overall financial status of the business
Tracks revenue, expenses & profit by individual projects

Explanation

Question 3 of 62

1

General Ledger Accounting is needed for which of the following?

Select one or more of the following:

Basic Accounting
Keeping track of money flowing into & out of a business
Day-to-day operations
Banking
Taxes
Auditing
Firm-wide statements about the overall financial status of a business so that firm owners can make decisions crucial to the firm's profitability & survival
Tracking revenue, expenses, & profit by individual projects
Knowing how the amount of time spent on specific projects affects the financial health of the firm
Assisting managers in deciding how to allocate resources, manage projects, & develop accurate proposals for new work

Explanation

Question 4 of 62

1

Project Cost Accounting is needed for which of the following?

Select one or more of the following:

Tracking revenue by individual projects
Tracking expenses by individual projects
Tracking profit by individual projects
Knowing how the amount of time spent on specific projects affects the financial health of a firm
Differentiating between projects that are making money & those that are losing money
Assisting managers in deciding how to allocate resources
Assisting managers in deciding how to manage projects
Assisting managers in developing accurate proposals for new work
Tracking money flowing into & out of the business & is needed for day-to-day operations, banking, taxes, & auditing
Providing firm-wide statements about the overall financial status of the business so that firm owners can make decisions crucial to the firm's profitability & survival

Explanation

Question 5 of 62

1

Which of the following describe Project Cost Accounting?

Select one or more of the following:

Helps managers decide how to allocate resources, manage projects, & develop accurate proposals for new work
Tracks revenue, expenses, & profit by individual projects
Shows how the amount of time spent on specific projects affects the financial health of a firm
Provides firm-wide statements about the overall financial status of a business so that firm owners can make decisions crucial to the firm's profitability & survival
Keeps track of money flowing into & out of a business & is needed for day-to-day operations, banking, taxes, & auditing

Explanation

Question 6 of 62

1

Which of the following correctly describes the, "Amounts owed to the suppliers of goods or services (such as consultants, reproduction companies, or the utility company) that have not yet been paid?"

Select one of the following:

Accounts Payable
Accounts Receiveable
Assets
Chart of Accounts

Explanation

Question 7 of 62

1

Which of the following correctly describes, "Money that others owe to a business through invoices for services?"

Select one of the following:

Accounts Payable
Accounts Receivable
Assets
Chart of Accounts

Explanation

Question 8 of 62

1

Which of the following correctly describes, "Any type of tangible or intangible resource that can be measured in monetary terms, including current assets, fixed assets, & other assets?"

Select one of the following:

Assets
Accounts payable
Accounts receivable
Chart of accounts

Explanation

Question 9 of 62

1

Which of the following correctly describes, "A list of the various accounts a business uses to keep track of money, along with corresponding account numbers used for data processing?"

Select one of the following:

Chart of Accounts
Balance Sheet
Profit & Loss Statement
Ledger

Explanation

Question 10 of 62

1

Which of the following describes, "Resources of a business that are converted into cash within one year?"

Select one of the following:

Assets
Fixed Assets
Other Assets
Current Assets

Explanation

Question 11 of 62

1

Which of the following describes, "All labor of technical staff, principals, & support staff that is directly chargeable to projects?"

Select one of the following:

Direct Labor
Total Labor
Overhead
Indirect Labor

Explanation

Question 12 of 62

1

Which of the following describes, "The expense of employee salaries plus the cost of mandatory & discretionary expenses & benefits such as payroll taxes & health insurance?"

Select one of the following:

Direct Expense
Direct Personnel Expense
Overhead
Indirect Personnel Expense

Explanation

Question 13 of 62

1

Which of the following correctly describes, "Voluntary distribution of profits to owners & non-owners, such as performance bonuses, profit sharing, & incentive compensation?"

Select one of the following:

Discretionary Distribution
Profit Distribution
Direct Personnel Expense
Distribution

Explanation

Question 14 of 62

1

Which of the following best describes, "Resources that the firm uses & retains for a long period of time, such as equipment & property?"

Select one of the following:

Assets
Current Assets
Fixed Assets
Other Assets

Explanation

Question 15 of 62

1

Which of the following correctly describes, "All the revenue generated by a business during a stated period of time?"

Select one of the following:

Total Revenue
Gross Revenue
Net Operating Revenue
Net Revenue

Explanation

Question 16 of 62

1

Which of the following correctly describes, "All labor not charged to a specific project or revenue-producing account, such as administration, general office time, & marketing?"

Select one of the following:

Overhead
Indirect Labor
Indirect Personnel Expense
Direct Labor

Explanation

Question 17 of 62

1

Which of the following correctly describes, "Claims by people outside the business & claims by the owners of the business against the total assets of the business."

Select one of the following:

Liabilities
Indemnification Clause
Personal Injury
Privity
Tort

Explanation

Question 18 of 62

1

Which of the following correctly describes, "The money that remains from billing after deducting fees & expenses, reimbursable expenses, & non-reimbursable project-related expenses?"

Select one of the following:

Net Operating Revenue (Net Revenue)
Gross Revenue
Total Revenue
Revenue

Explanation

Question 19 of 62

1

Which of the following correctly describes, "Miscellaneous resources such as securities & copyrights?"

Select one of the following:

Other Assets
Current Assets
Assets
Fixed Assets

Explanation

Question 20 of 62

1

Which of the following correctly describes, "Expenses incurred to keep a business operating whether or not any revenue is being generated, such as rent, software leases, & fees for power & telephone service?"

Select one of the following:

Overhead
Indirect Expenses
Non-Reimbursable Expenses
Reimbursable Expenses

Explanation

Question 21 of 62

1

Fill the blank spaces to complete the text.

Net Revenue (NOR) = (Gross Revenue) - ( + + + Project Related Expenses)

Explanation

Question 22 of 62

1

Which of the following are the (2) basic accounting methods?

Select one or more of the following:

Cash Accounting
Accrual Accounting
General Ledger Accounting
Project Cost Accounting
Modified Accrual Basis Method

Explanation

Question 23 of 62

1

Which of the following apply to Cash Accounting?

Select one or more of the following:

revenue & expenses are recognized at the time the business receives the cash or pays a bill
Better means of accounting for tracking actual cash flow
Fairly simple & is often used by single-person businesses & small businesses
Revenue & Expenses are recognized at the time they are earned or incurred, whether or not cash changes hands
Gives a better picture of a businesses's long term financial status & provides information that is important for active financial management
Best for businesses above a certain size or that maintain inventory are required by the IRS to use accrual accounting

Explanation

Question 24 of 62

1

Which of the basic accounting methods is best suited for a single person business or small businesses?

Select one or more of the following:

Cash Accounting
Accrual Accounting
Modified Accrual Basis Method
Project Cost Accounting

Explanation

Question 25 of 62

1

Businesses above a certain size or that maintain inventory are required by the IRS to use which basic accounting method?

Select one of the following:

Cash Accounting
Accrual Accounting
Project Cost Accounting
General Ledger Accounting

Explanation

Question 26 of 62

1

Which of the following apply to Accrual Accounting?

Select one or more of the following:

Revenue & Expenses are recognized at the time they are earned or incurred, whether or not cash changes hands
Gives a better picture of a business's long term financial status & provides information that is important for active financial management
Businesses above a certain size or that maintain inventory are required by the IRS to use this accounting method
Revenue & expenses are recognized at the time the business receives the cash or pays a bill
Better at tracking actual cash flow
Fairly simple & is often used by single-person businesses & small businesses

Explanation

Question 27 of 62

1

Which basic accounting method recognizes revenue & expenses at the time the business receives the cash or pays a bill?

Select one of the following:

Cash Accounting
Project Cost Accounting
Accrual Accounting
Modified Accrual Basis Method

Explanation

Question 28 of 62

1

Which basic accounting method recognizes revenue & expenses at the time they are earned or incurred, whether or not cash changes hands?

Select one of the following:

Accrual Accounting
Cash Accounting
General Ledger Accounting
Project Cost Accounting

Explanation

Question 29 of 62

1

Which of the following is an example of Accrual Accounting?

Select one of the following:

A firm sends an invoice to a client for $50,000 & that money is listed as revenue even though the client has not yet paid the invoice
A firm sends an invoice to a client for $50,000 & that money is listed as revenue only once the client has paid the invoice

Explanation

Question 30 of 62

1

What is the difference between Accrual Accounting & Modified Accrual Accounting (Modified Accrual Basis Method)?

Select one of the following:

Records fee revenue, expenses billed to the client, & invoices to the firm by outside consultants
Records fee revenue, expenses billed to the client, & invoices to the firm by outside consultants but does NOT include the amounts of fees that have been earned but not yet billed to the client
Recognizes revenue & expenses only when actual cash changes hands

Explanation

Question 31 of 62

1

Which of the following are recorded by the Modified Accrual Basis Method?

Select one or more of the following:

Fee Revenue
Expenses billed to the client
Invoices to the firm by outside consultants
The amounts of fees that have been earned but not yet billed to the client

Explanation

Question 32 of 62

1

Accrual Accounting uses which of the following methods to record & organize all revenue & expenses into individual accounts?

Select one of the following:

Double-Entry Bookkeeping
Journal Accounting
Ledger Accounting
General Ledger Accounting

Explanation

Question 33 of 62

1

Which of the following are reasons why Cash Accounting & Accrual Accounting group all revenue & expenses into individual accounts?

Select one or more of the following:

Auditing
Review
Tax Preparation
Management
Analysis
Insurance

Explanation

Question 34 of 62

1

Which of the following describes, "All transactions are listed chronologically in a journal. They are then posted to a ledger where transactions are grouped into individual accounts?"

Select one of the following:

Double-Entry Bookkeeping
General Ledger Accounting
Ledger Accounting
Bookkeeping

Explanation

Question 35 of 62

1

Which of the following are the most common types of Accounting Reports?

Select one or more of the following:

Balance Sheet
Modified Accrual Basis Method
Profit & Loss Statement
Cash Flow Statement
Double Entry Bookkeeping

Explanation

Question 36 of 62

1

Which of the following is an important aspect of the balance sheet?

Select one of the following:

Net Worth of the Business (aka Owner's Equity)
Total Liabilities
Cash Equivalents
Cash Flow

Explanation

Question 37 of 62

1

Which of the following apply to the Balance Sheet?

Select one or more of the following:

Summarizes all assets & liabilities & shows the financial position of a business
All the assets listed must exactly equal all the liabilities listed
The Total Assets must = (Total Liabilities + The Net Worth or Owner's Equity)
The Net Worth or Owner's Equity is an important part of this report
Lists all the income & expenses of a business for a certain period of time
Shows the actual inflows & outflows of cash or cash equivalents

Explanation

Question 38 of 62

1

Which of the following describe Net Worth?

Select one or more of the following:

Owner's Equity
= (Total Assets) - (Total Liabilities)
The money invested in a business by the owners or stockholders
defined as money, checks, or anything else accepted by banks
Short-term investments that can be quickly converted into cash, such as short-term certificates of deposit

Explanation

Question 39 of 62

1

Which of the following describe Owner's Equity?

Select one or more of the following:

Net Worth
The money invested in a business by the owners or stockholders
= (Total Assets) - (Total Liabilities)
Short-term investments that can be quickly converted into cash, such as short-term certificates of deposit
Defined as money, checks, or anything else accepted by banks

Explanation

Question 40 of 62

1

Which of the following apply to the Profit & Loss Statement?

Select one or more of the following:

Lists all the income & expenses of a business for a certain period of time
The difference between all the income & all the expenses gives either the profit or the loss for that period
Income Statement
Shows the actual inflows & outflows of cash or cash equivalents
Summarizes all assets & liabilities & shows the financial position of a business

Explanation

Question 41 of 62

1

Which of the following apply to the Cash Flow Statement

Select one or more of the following:

Shows the actual inflows & outflows of cash or cash equivalents
This statement is important because a business's month to month financial health depends on being able to meet payroll & pay bills
Lists all the income & expenses of a business for a certain period of time
Summarizes all assets & liabilities & shows the financial position of a business
Cash is defined as money, checks, or anything else accepted by banks

Explanation

Question 42 of 62

1

Which of the following describes Cash Equivalents?

Select one of the following:

Short-term investments that can be quickly converted into cash, such as short-term certificates of deposit
Current Assets
Defined as money, checks, or anything else accepted by banks
Resources of a business that are converted into cash within one year

Explanation

Question 43 of 62

1

Profit Planning & Financial Management Reports include which of the following?

Select one or more of the following:

Active Planning
Monitoring & Controlling of financial information
Acting on financial information

Explanation

Question 44 of 62

1

What is the fundamental equation for financial planning in any profit oriented business?

Select one or more of the following:

(Profit + Expenses) = Revenue; If the business will make its targeted profit, & controls expenses, what is the appropriate revenue that needs to be generated to achieve that targeted profit
(Revenue - Expenses) = Profit; Profit is whatever may be left over after expenses are subtracted from revenue
(Net Operating Revenue) / (Total Direct Labor Costs)
(Total Indirect Expenses) / (Total Direct Labor Costs)

Explanation

Question 45 of 62

1

Which of the following are the (2) typical means to increase revenue?

Select one or more of the following:

Increase how much work the firm does
Increase Fees
Decrease indirect labor
Reducing overhead costs

Explanation

Question 46 of 62

1

Which of the following is one of the highest percentages of overhead?

Select one of the following:

Indirect Labor (Personnel who do not directly work on projects)
Direct Labor
Non-Reimbursable expenses
Reimbursable Expenses

Explanation

Question 47 of 62

1

What is the typical means for controlling expenses?

Select one of the following:

Reducing overhead wherever possible
Decreasing reimbursable & non reimbursable expenses
Increasing how much work the firm does
Increasing Fees

Explanation

Question 48 of 62

1

Other than the basic accounting reports, which of the following are the typical Planning Reports & Financial Management Reports?

Select one or more of the following:

Project Progress Report
Office Earnings Report
Aged Accounts Receivable Report
Time Analysis Report
Project Cost Accounting
Balance Sheet
Profit & Loss Statement
Accrual Accounting Report

Explanation

Question 49 of 62

1

Which of the following apply to Project Progress Reports?

Select one or more of the following:

Shows the hours & labor costs for each phase of a project, both for the current reporting period, & the total to date, & compares these numbers with the estimated hours & costs
Shows direct costs, such as for consultants, overhead allocations, & reimbursable expenses
Gives the project manager & firm management an accurate look at the status of a project & can be used to take corrective action as necessary
Summarizes each of the firm's projects in terms of the amount of revenue it has generated, the expenses it has incurred, un-billed services, percentage of completion, & profit or loss to date
Shows the status of all invoices for all projects, whether or not they have been paid
Tracks revenue, expenses, & profit by individual projects
Shows how the amount of time spent on specific projects affects the financial health of a firm

Explanation

Question 50 of 62

1

Which of the following apply to the Office Earnings Report?

Select one or more of the following:

Summarizes each of the firm's projects in terms of the amount of revenue it has generated, the expenses it has incurred, unbilled services, percentage of completion, & profit or loss to date
Can help firm management find any projects that may be hurting overall profitability & need remedial action
Shows the status of all invoices for all projects, whether or not they have been paid
Shows the hours & labor costs for each phase of a project, both for the current reporting period, & the total to date, & compares these numbers with the estimated hours & costs
Shows direct costs, such as for consultants, overhead allocations, & reimbursable expenses

Explanation

Question 51 of 62

1

The office earnings report summarizes each of the firms projects in terms of which of the following?

Select one or more of the following:

The amount of revenue it has generated
The expenses it has incurred
Unbilled serivces
Percentage of completion
Profit or Loss to date

Explanation

Question 52 of 62

1

Which of the following apply to Aged Accounts Receivable?

Select one or more of the following:

Shows the status of all invoices for all projects, whether or not they have been paid
Shows the "age" of each invoice, which is the time from the invoice date to the payment date, or to the current date if still unpaid
Shows the hours & labor costs for each phase of a project, both for the current reporting period & the total to date, & compares these numbers with the estimated hours & costs
Shows direct costs, such as those for consultants, overhead allocations, & reimbursable expenses
Give the project manager & firm management an accurate look at the status of a project & can be used to take corrective action as necessary
Summarizes each of the firm's projects in terms of the amount of revenue it has generated, the expenses it has incurred, unbilled services, percentage of completion, & profit or loss to date
Can help firm management find any projects that may be hurting overall profitability & need remedial action

Explanation

Question 53 of 62

1

What is the average collection period of invoices?

Select one of the following:

Between 60 & 75 Days
Between 45 & 60 days
Between 75 & 90 Days
Between 60 & 90 Days

Explanation

Question 54 of 62

1

What is the break-even chargeable ratio (utilization rate) for the whole firm & the targeted rate for technical staff?

Select one of the following:

65% for the whole firm & 75%-85% for technical staff
65% for the whole firm & 85%-95% for technical staff
75% for the whole firm & 85%-95% for technical staff
70% for the whole firm & 75%-85% for technical staff

Explanation

Question 55 of 62

1

Which of the following are the Financial Ratios?

Select one or more of the following:

Current Ratio
Net Profit before Tax
Overhead Rate
Quick Ratio
Revenue per technical staff
Revenue per total staff
Billing Rate
Utilization Rate

Explanation

Question 56 of 62

1

For accounting purposes, a large plotter is considered:

Select one of the following:

A current asset
A fixed asset
A liability
An overhead expense

Explanation

Question 57 of 62

1

Which of the following financial ratios can be used to estimate the required net operating revenue for future budgets, & if the NOR is known, can also estimate staffing levels?

Select one or more of the following:

Net Operating Revenue Per Technical Staff Member
Net Operative Revenue per Total Staff
Current Ratio
Quick Ratio

Explanation

Question 58 of 62

1

Which of the following make up Billing Rates?

Select one or more of the following:

Employee's Salary
The Costs for that Employee's Fringe Benefits
The Cost of Office Overhead
An Allowance for Profit

Explanation

Question 59 of 62

1

How can the hourly billing rate of an employee be determined with the Net Multiplier?

Select one of the following:

Billing Rate = (Net Multiplier) x (Dollar amount employee is paid hourly)
Billing Rate = (Employees Hourly Salary + Fringe Benefits + The Cost of Office Overhead + An allowance for profit)

Explanation

Question 60 of 62

1

The Net Multiplier accounts for which of the following?

Select one or more of the following:

Fringe Benefits
Indirect Labor
Overhead
Profit
Hourly Labor Cost per employee

Explanation

Question 61 of 62

1

What are the (4) basic steps to collecting accounts receivable?

Select one or more of the following:

Contract Terms
Timely Billing
Complete Invoices
Regular Procedures for tracking accounts
Selection of appropriate project delivery method

Explanation

Question 62 of 62

1

Which of the following should be included in the contract regarding fee collection?

Select one or more of the following:

The basis for the fee
When invoices will be sent & in what form
When payment is due
Any penalties for late payment such as interest charges after 45 day s or some other reasonable period of time
Provisions for nonpayment including stopping work on the client's project & making no presentations until the payment has been received

	Created by Marita Rose over 6 years ago

Architectural Registration Exam - NCARB A.R.E 5.0 Practice Management Quiz on Financial Management, created by Marita Rose on 15/01/2018.

Financial Management

Question 1 of 62

The (2) broad categories of accounting in the financial management of a firm are?

Select one or more of the following:

Explanation

Question 2 of 62

Which of the following best describes General Ledger Accounting?

Select one of the following:

Explanation

Question 3 of 62

General Ledger Accounting is needed for which of the following?

Select one or more of the following:

Explanation

Question 4 of 62

Project Cost Accounting is needed for which of the following?

Select one or more of the following:

Explanation

Question 5 of 62

Which of the following describe Project Cost Accounting?

Select one or more of the following:

Explanation

Question 6 of 62

Which of the following correctly describes the, "Amounts owed to the suppliers of goods or services (such as consultants, reproduction companies, or the utility company) that have not yet been paid?"

Select one of the following:

Explanation

Question 7 of 62

Which of the following correctly describes, "Money that others owe to a business through invoices for services?"

Select one of the following:

Explanation

Question 8 of 62

Which of the following correctly describes, "Any type of tangible or intangible resource that can be measured in monetary terms, including current assets, fixed assets, & other assets?"

Select one of the following:

Explanation

Question 9 of 62

Which of the following correctly describes, "A list of the various accounts a business uses to keep track of money, along with corresponding account numbers used for data processing?"

Select one of the following:

Explanation

Question 10 of 62

Which of the following describes, "Resources of a business that are converted into cash within one year?"

Select one of the following:

Explanation

Question 11 of 62

Which of the following describes, "All labor of technical staff, principals, & support staff that is directly chargeable to projects?"

Select one of the following:

Explanation

Question 12 of 62

Which of the following describes, "The expense of employee salaries plus the cost of mandatory & discretionary expenses & benefits such as payroll taxes & health insurance?"

Select one of the following:

Explanation

Question 13 of 62

Which of the following correctly describes, "Voluntary distribution of profits to owners & non-owners, such as performance bonuses, profit sharing, & incentive compensation?"

Select one of the following:

Explanation

Question 14 of 62

Which of the following best describes, "Resources that the firm uses & retains for a long period of time, such as equipment & property?"

Select one of the following:

Explanation

Question 15 of 62

Which of the following correctly describes, "All the revenue generated by a business during a stated period of time?"

Select one of the following:

Explanation

Question 16 of 62

Which of the following correctly describes, "All labor not charged to a specific project or revenue-producing account, such as administration, general office time, & marketing?"

Select one of the following:

Explanation

Question 17 of 62

Which of the following correctly describes, "Claims by people outside the business & claims by the owners of the business against the total assets of the business."

Select one of the following:

Explanation

Question 18 of 62

Which of the following correctly describes, "The money that remains from billing after deducting fees & expenses, reimbursable expenses, & non-reimbursable project-related expenses?"

Select one of the following:

Explanation

Question 19 of 62

Which of the following correctly describes, "Miscellaneous resources such as securities & copyrights?"

Select one of the following:

Explanation

Question 20 of 62

Which of the following correctly describes, "Expenses incurred to keep a business operating whether or not any revenue is being generated, such as rent, software leases, & fees for power & telephone service?"