5. Accounting entity refers to:

a) The universal accounting denominator used to express assets, liabilities, and owners equity so as to describe the financial position of an entity.

b) The fact that the business entity will continue in operational existence for the foreseeable future.

c) The entry of the entity s assets into account in the accounting process at the cost the entity incurred in acquiring them.

d) The entity to which the financial information pertains to.

6. Which of the following is not profitability ratio?

a) Return on equity

b) Earnings per share

c) Inventory turnover

d) Net working capital

7. What is the ideal current asset ratio?

a) 2:1

b) 1:1

c) 1:2

d) 1:3

8. Which cost classification is used for decision making?

a) Variable cost

b) Indirect cost

c) Direct Labour cost

d) Incremental cost

9. Breakeven point refers to:

a) The level at which total costs equal total revenues.

b) The level at which total fixed costs equal total costs

c) The level at which total sales equal total fixed costs

d) The level at which total costs exceed total revenue.

10. Marginal Income is equal to:

a) Selling price per unit variable cost per unit

b) Sales variable cost

c) Sales -variable cost fixed cost

d) Sales Fixed cost