Accounting

Question 1

Return on assets

Answer 1

Financial ratio that indicates how profitable a company is in relation to its total assets.

Question 2

Working capital

Answer 2

Financial metric that is the difference between a company’s curent assets and current liabilities.

Question 3

Gross profit margin

Answer 3

The profit after subtracting the cost of goods sold

Question 4

Liquidity

Answer 4

efficiency or ease with which an asset or security can be converted into ready cash without affecting its market price

Question 5

Goodwill

Answer 5

the good relationship between a business and its customers that is calculated as part of its value when it is sold

Question 6

Accrual

Answer 6

record of revenue or expenses that have been earned or incurred but have not yet been recorded in the company’s financial documents

Question 7

Contingent liability

Answer 7

liability or a potential loss that may occur in the future depending on the outcome of a specific event. Potential lawsuits, product warranties, and pending investigation are some examples of contingent liability.

Question 8

Accounts payable

Answer 8

a company’s short-term obligations owed to its creditors or suppliers, which have not yet been paid