Finance 101: Test Your Basic Knowledge! Quiz

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| By Cvcm_finance

Cvcm_finance

Community Contributor

Quizzes Created: 3 | Total Attempts: 3,524

Questions: 9 | Attempts: 1,314 | Updated: Mar 21, 2023

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Finance 101: Test Your Basic Knowledge! Quiz - Quiz

Finance 101: test your basic knowledge quiz. Just how good are you when it comes to some basic finance concepts such as debt financing and credit? Debt financing the next option that most businesses have when they don’t have enough equity. Do you understand inventory taking, control and earning per share? This quiz will offer you a quick refresher on these topics. Do give it a try and check out other quizzes just like it!

Questions and Answers

1.

Gross Margin is the difference between:
- A.
  
  Revenue and all standard cost
- B.
  
  Asset and Liabilities
- C.
  
  Revenue and Net Income
Correct Answer
A. Revenue and all standard cost

Explanation
Gross Margin is the difference between revenue and all standard costs. This means that it represents the amount of money left over after deducting the direct costs associated with producing goods or services. It is a measure of profitability and indicates how efficiently a company is utilizing its resources to generate revenue. By subtracting the standard costs from the revenue, the gross margin helps businesses determine their profitability and make informed decisions regarding pricing, cost control, and overall financial performance.

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2.

Which of the following is NOT one of the Overhead Spend under the NMS (Non-Material Spend)?
- A.
  
  DF Fees
- B.
  
  E&O Provisions
- C.
  
  Freight
Correct Answer
B. E&O Provisions

Explanation
E&O Provisions is not one of the Overhead Spend under the NMS (Non-Material Spend). This means that E&O Provisions are considered as part of the Overhead Spend and not excluded from it. The other options, DF Fees and Freight, are included in the Overhead Spend category.

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3.

DF Fees is quoted ___________ with CM and is paid through AVP.
- A.
  
  Monthly
- B.
  
  Quarterly
- C.
  
  Annually
Correct Answer
B. Quarterly

Explanation
DF Fees is quoted on a quarterly basis, meaning that the fees are calculated and quoted every three months. These fees are paid through AVP, which is the designated payment method. This suggests that the payment for DF Fees is made every quarter, aligning with the frequency at which the fees are quoted. Therefore, the correct answer is Quarterly.

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4.

What is an MPM role in reporting accurate costs?
- A.
  
  Responsible for Standard Cost and BOM accuracy to the PID at both Local and Global Level
- B.
  
  Accountable for accuracy of reported Product Standard Cost
- C.
  
  Resolve standard cost , PPV, BOM attribute issues
Correct Answer
B. Accountable for accuracy of reported Product Standard Cost

Explanation
The MPM role in reporting accurate costs is accountable for ensuring the accuracy of the reported product standard cost. This means that they are responsible for making sure that the cost of the product is accurately calculated and reported. They may also be responsible for resolving any issues related to standard cost, purchase price variance (PPV), and bill of materials (BOM) attributes. Additionally, they are responsible for ensuring that the standard cost and BOM accuracy align with the Product Information Database (PID) at both the local and global level.

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5.

Which of the following is part of the Cisco Inventory?
- A.
  
  Finished Goods at the SLC
- B.
  
  Last Time Buy inventory at Avnet
- C.
  
  All the above
Correct Answer
C. All the above

Explanation
All the options mentioned in the question are part of the Cisco Inventory. The "Finished Goods at the SLC" refers to the finished products that are stored at the SLC (Shipping, Logistics, and Configuration) facility. The "Last Time Buy inventory at Avnet" refers to the inventory of products that are no longer in production but are still available for purchase from the distributor Avnet. Therefore, "All the above" options include both the finished goods at the SLC and the Last Time Buy inventory at Avnet.

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6.

Which of the following is true?
- A.
  
  Lower product cost translates to better EPS
- B.
  
  Higher E&O and lower buy-down translates to better EPS
- C.
  
  None of the above
Correct Answer
A. Lower product cost translates to better EPS

Explanation
Lower product cost translates to better EPS because when the cost of producing a product is lower, the company can either sell it at a lower price, which can increase sales volume, or maintain the same price and increase profit margin. In both cases, the company's earnings per share (EPS) would be positively affected. Lower product cost can also lead to improved efficiency and cost management, which can further contribute to better EPS.

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7.

What does "Inventory Turns" mean?
- A.
  
  Metric to show how many times a year you could sell a pool of inventory
- B.
  
  Weeks of supply
- C.
  
  All the above
Correct Answer
C. All the above

Explanation
"Inventory Turns" refers to a metric that measures how many times a company is able to sell its inventory within a year. It is calculated by dividing the cost of goods sold by the average inventory value. This metric helps businesses assess their efficiency in managing inventory and can be used to optimize inventory levels. Additionally, "Inventory Turns" can also be interpreted as "Weeks of supply," which indicates the number of weeks a company's inventory can sustain its sales. Therefore, the correct answer is "All the above" as both explanations accurately describe what "Inventory Turns" mean.

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8.

Quality Scrap comes from
- A.
  
  Quarterly E&O provision
- B.
  
  Non Nettable Location
- C.
  
  None of the above
Correct Answer
B. Non Nettable Location

Explanation
Quality scrap does not come from the Quarterly E&O provision, as this provision refers to the adjustment made for errors and omissions in financial statements. It also does not come from a non-nettable location, which refers to a location that is not eligible for netting or offsetting of financial transactions. Therefore, the correct answer is "None of the above."

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9.

Which of the following is NOT true about a Credit Memo?
- A.
  
  Credit Memo is money owed to Cisco by a supplier
- B.
  
  Credit Memo is issued by CM Finance
- C.
  
  Credit Memo is issued by Cisco A/P
Correct Answer
C. Credit Memo is issued by Cisco A/P

Explanation
The given correct answer is "Credit Memo is issued by Cisco A/P." A Credit Memo is a document issued by a seller to a buyer, indicating that the buyer's account has been credited with a specific amount. It is used to correct errors or provide refunds to the buyer. While Cisco A/P (Accounts Payable) is responsible for managing the company's payments to suppliers, they do not issue Credit Memos. Therefore, this statement is not true.

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Current Version
Mar 21, 2023

Quiz Edited by
ProProfs Editorial Team
May 02, 2011

Quiz Created by
Cvcm_finance

Finance 101: Test Your Basic Knowledge! Quiz

Gross Margin is the difference between:

Which of the following is NOT one of the Overhead Spend under the NMS (Non-Material Spend)?

DF Fees is quoted ___________ with CM and is paid through AVP.

What is an MPM role in reporting accurate costs?

Which of the following is part of the Cisco Inventory?

Which of the following is true?

What does "Inventory Turns" mean?

Quality Scrap comes from

Which of the following is NOT true about a Credit Memo?