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Quiz on Commercial Finance for Buying and Selling Pros

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

Robert Menard, Certified Purchasing Professional, Certified Professional Purchasing Consultant

Please score your answers to this Commercial Finance Quiz.  Each answer is worth 5 points

If you have them all correct, send me your answers and I’ll send you a free copy of my book, You’re the Buyer – You Negotiate It.

If you don’t know for sure if your answer is correct, it probably isn’t.  For the ANSWER list, email RobertMenard@RobertMenard.com.  

Commercial finance is a mystery to most purchasing and sales pros.  Buyers must understand supplier finance and sellers must know more than can be gained from a basic business course for each to succeed.

After you complete this Quiz, if you want to address another deficiency for purchasing and sales pros, take the Purchasing Law Quiz.

1    From the data table below, calculate                                                                  

  • Current Ratio                   
  • Working Capital               
  • Debt/Equity Ratio        
Total Current Assets


Total Current Liabilities


Total Debt




Share Holders Equity


2    Which data value was not used for any of these calculations?             

3    Which one of these is not a current asset?                                                   

  • Cash
  • Accounts Receivable
  • Plant and Equipment
  • Stock certificates for publicly traded companies

 4    When is inventory not a current asset?                                                     

 5    An audited financial statement by an independent firm carries what type of opinion on financial condition.                                                                                               

  • Unqualified
  • Qualified
  • None

6     What is or are GAAP                                                                                         

7     For accounting purposes, what is a 10k?                                                  

  • $10,000
  • An annual road race fund raiser
  • An annual statement of financial condition from a publicly traded company
  • $1,000,000

8    For a publicly traded company, what is an analyst call?                            

9     What is meant by accrual method of accounting?                                          

10    Generally, is loan forgiveness taxable income?          Yes or No              

11    For Sarbanes Oxley purposes, why are open line items on a purchase order considered contingent liabilities?                                                                                                        

blog  57 financial statements12    What is subordinate debt?                                                                                      

  • Debt that exceeds prescribed maximums
  • Debt that falls below prescribed maximums
  • Debt for which a lender stands behind superior claims
  • Debt for which a lender stands ahead of superior claims

13    Which one of these is not found on the Balance Sheet?                             

  • Long Term Liabilities
  • Cost of Goods Sold
  • Current Assets
  • Shareholders Equity

14    Which one is not found on a Profit and Loss (Income) statement?           

  • Long Term Assets
  • Sales
  • Net Profit/Loss
  • Taxes

15    What is an S corporation?                                                                                

16    Which of these is not a recognized method of Inventory valuation  

  • LIFO         Last In First Out
  • FISH         First In Still Here
  • FIFO         First In First Out
Click to see Bob's online training courses

Click to see Bob's online training courses

17    Which of these is an asset                                                                                

  • Debenture indebtedness
  • Billings in excess of costs
  • Certificates of deposit
  • Trade payables

18    Unsecured debt means                                                                                     

  • The debtor is insecure
  • The creditor is secure
  • The debtor’s claim is subordinate to secured creditors
  • The debtor’s claim is superior to secured creditors

19     Generally, lease payments are depreciable.     True or False                                     

20   Specify one major difference between a corporation and a partnership or proprietorship.                                                                                                    

21     What is meant by cash method of accounting?                                            


SCORING     If you do not know for sure, give no credit

00 to 50         Wow, my bad

55 to 80         Needs work

85 to 115       Bravo!

If you do not know as much as you thought you should, you are in the majority!  Education and training is not what it should be in the purchasing and sales profession.

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