CAFM Financial Management Question and answers already passed 2024/2025
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Course
REFM
Institution
REFM
CAFM Financial Management Question and answers already passed 2024/2025 CAFM Financial Management
Define Accounting - correct answer The information system that identifies, records, and communicates the economic events of an organization to interested users.
What are some uses of accounti...
CAFM Financial Management
Define Accounting - correct answer ✔The information system that identifies,
records, and communicates the economic events of an organization to
interested users.
What are some uses of accounting information - correct answer ✔Evaluate
financial consequences
Eliminate unsound judgement
Monitor business operations
Regulatory reasons such as taxes etc
Define managerial accounting - correct answer ✔the area of accounting that
serves the decision-making needs of internal users
Uses of Managerial Accounting - correct answer ✔Financial decisions
Allocation decisions
Production decisions
Marketing decisions
Define financial decisions - correct answer ✔How much money is needed to
purchase new vehicles, equipment, or machinery
Define allocation decisions - correct answer ✔How much money should be
spent and what it should be spent on
Define production decisions - correct answer ✔What to produce, when to
make it and when to make it
,Define marketing decisions - correct answer ✔How to sell the product, price,
target market and how to get it to the buyer
Define the term business entity - correct answer ✔Any business organization
that exists as an economic unit.
Define sole proprietor - correct answer ✔Someone who is in business for
themselves and the business is unincorporated
What is a major disadvantage of Sole proprietorship - correct answer ✔If the
business fails creditors can go after the owners personal assets
Define partnership - correct answer ✔a business owned by two or more
people
Disadvantages of a partnership are - correct answer ✔(1) Unlimited liability
(2) Limited life
(3) Difficulty of transferring ownership
(4) Difficulty of raising large amounts of capital
(5) partners are liable for actions of the other partner
(6) no corporate protections
Define corporation - correct answer ✔A business owned by stockholders
who share in its profits but are not personally responsible for its debts
, Disadvantages of a corporation are - correct answer ✔Taxes are paid on the
corporations earnings as well as any dividends paid to its share holders
Advantages of corporation - correct answer ✔limited liability, ability to raise
capital and transfer ownership
Why should fleet managers understand accounting? - correct answer ✔Fleet
managers may be called to provide details and advice in their area of
expertise
Define accrual accounting - correct answer ✔Accrual accounting recognizes
revenues and expenses when they occur, not when cash actually changes
hands. Most companies use accrual accounting to prepare their financial
statements.
Advantages of Accrual Accounting - correct answer ✔-spreads out the
influence of one-time events that affect multiple reporting periods
-captures long-run performance
-recognizes assets and liabilities associated with receivables and payables
Disadvantages of Accrual Accounting - correct answer ✔-Requires the
company to spend more time reviewing transactions and incur additional labor
costs.
-Companies who use accrual accounting need to analyze each account
monthly.
Advantages to Cash accounting - correct answer ✔simple and easy to use
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