1. Introduction to Financial Terms and Concepts

Which of the following is NOT a key financial term?

• Revenue
• Expense
• Profit
• Temperature

What is the accounting equation?

• Assets = Liabilities - Owner's Equity
• Assets = Liabilities + Owner's Equity
• Liabilities = Assets + Owner's Equity
• Owner's Equity = Assets - Liabilities

What is the primary purpose of a balance sheet?

• To show the profitability of a business over a period of time.
• To show the cash inflows and outflows of a business.
• To show the financial position of a business at a specific point in time.
• To show the break-even point of a business.

What is the term for the costs that remain constant regardless of the level of production or sales?

• Variable costs
• Fixed costs
• Marginal costs
• Opportunity costs

Which of the following is a common financial risk faced by tourism businesses?

• Currency fluctuations
• Stable economic conditions
• Low demand for tourism products
• Consistent customer satisfaction

What is the break-even point?

• The point at which total revenue equals total expenses.
• The point at which a business starts making a profit.
• The point at which a business starts incurring losses.
• The point at which a business reaches its maximum capacity.

What is the primary purpose of a cash flow statement?

• To show the profitability of a business over a period of time.
• To show the financial position of a business at a specific point in time.
• To show the movement of cash in and out of a business.
• To show the break-even point of a business.

Which of the following is NOT a common financial ratio used in business analysis?

• Profit margin
• Current ratio
• Debt-to-equity ratio
• Gross Domestic Product (GDP)

What is the importance of budgeting for a tourism business?

• To track past performance.
• To plan for future expenses and revenue.
• To analyse competitor's financial statements.
• To calculate the break-even point.

How can tourism businesses mitigate the risk of currency fluctuations?

• Ignoring currency exchange rates.
• Hedging currency exchange rates.
• Increasing prices to offset losses.
• Reducing marketing expenses.