Question 1

Which of the following are current assets?
I.patent
II.inventory
III.accounts payable
IV.cash

Accepted Answer

A)   I and III only
B)   II and IV only
C)   I,II,and IV only
D)   I,II and IV only
E)   II,III,and IV onlyF) A) and E)
G) A) and D)

Question 2

The tax rates are as shown.Nevada Mining currently has taxable income of $97,800.How much additional tax will the firm owe if taxable income increases by $21,000?

Accepted Answer

A)   $8,080
B)   $8,130
C)   $8,155
D)   $8,170
E)   $8,190F) All of the above
G) B) and E)

Question 3

A firm has $520 in inventory,$1,860 in fixed assets,$190 in accounts receivables,$210 in accounts payable,and $70 in cash.What is the amount of the current assets?

Accepted Answer

A)   $710
B)   $780
C)   $990
D)   $2,430
E)   $2,640F) A) and E)
G) All of the above

Question 4

The common set of standards and procedures by which audited financial statements are prepared is known as the:

Accepted Answer

A)   matching principle.
B)   cash flow identity.
C)   Generally Accepted Accounting Principles.
D)   Financial Accounting Reporting Principles.
E)   Standard Accounting Value Guidelines.F) None of the above
G) C) and D)

Question 5

Which one of the following costs is most apt to be a fixed cost?

Accepted Answer

A)   production labor cost
B)   depreciation
C)   raw materials
D)   utilities
E)   sales commissionsF) A) and D)
G) C) and D)

Question 6

Which one of the following accounts is the most liquid?

Accepted Answer

A)   inventory
B)   building
C)   accounts receivable
D)   equipment
E)   landF) A) and B)
G) A) and C)

Question 7

Which of the following is (are) included in the market value of a firm but are excluded from the firm's book value?
I.value of management skills
II.value of a copyright
III.value of the firm's reputation
IV.value of employee's experience

Accepted Answer

A)   I only
B)   II only
C)   III and IV only
D)   I,II,and III only
E)   I,III,and IV onlyF) A) and D)
G) A) and E)

Question 8

Shareholders' equity:

Accepted Answer

A)   increases in value anytime total assets increases.
B)   is equal to total assets plus total liabilities.
C)   decreases whenever new shares of stock are issued.
D)   includes long-term debt,preferred stock,and common stock.
E)   represents the residual value of a firm.F) A) and B)
G) A) and C)

Question 9

The cash flow of a firm which is available for distribution to the firm's creditors and stockholders is called the:

Accepted Answer

A)   operating cash flow.
B)   net capital spending.
C)   net working capital.
D)   cash flow from assets.
E)   cash flow to stockholders.F) B) and C)
G) C) and D)

Question 10

Net working capital is defined as:

Accepted Answer

A)   total liabilities minus shareholders' equity.
B)   current liabilities minus shareholders' equity.
C)   fixed assets minus long-term liabilities.
D)   total assets minus total liabilities.
E)   current assets minus current liabilities.F) A) and B)
G) B) and D)

Question 11

Noncash items refer to:

Accepted Answer

A)   accrued expenses.
B)   inventory items purchased using credit.
C)   the ownership of intangible assets such as patents.
D)   expenses which do not directly affect cash flows.
E)   sales which are made using store credit.F) A) and E)
G) B) and C)

Question 12

Which one of these is most apt to be a fixed cost?

Accepted Answer

A)   raw materials
B)   manufacturing wages
C)   management bonuses
D)   office salaries
E)   shipping and freightF) B) and C)
G) A) and D)

Question 13

Four years ago,Velvet Purses purchased a mailing machine at a cost of $176,000.This equipment is currently valued at $64,500 on today's balance sheet but could actually be sold for $58,900.This is the only fixed asset the firm owns.Net working capital is $57,200 and long-term debt is $111,300.What is the book value of shareholders' equity?

Accepted Answer

A)   $4,800
B)   $7,700
C)   $10,400
D)   $222,600
E)   $233,000F) A) and D)
G) A) and B)

Question 14

Webster World has sales of $12,900,costs of $5,800,depreciation expense of $1,100,and interest expense of $700.What is the operating cash flow if the tax rate is 32 percent?

Accepted Answer

A)   $4,704
B)   $5,749
C)   $5,404
D)   $7,036
E)   $7,100F) D) and E)
G) A) and B)

Question 15

Net capital spending:

Accepted Answer

A)   is equal to ending net fixed assets minus beginning net fixed assets.
B)   is equal to zero if the decrease in the net fixed assets is equal to the depreciation expense.
C)   reflects the net changes in total assets over a stated period of time.
D)   is equivalent to the cash flow from assets minus the operating cash flow minus the change in net working capital.
E)   is equal to the net change in the current accounts.F) B) and D)
G) C) and D)

Question 16

Which one of the following represents the most liquid asset?

Accepted Answer

A)   $100 account receivable that is discounted and collected for $96 today
B)   $100 of inventory which is sold today on credit for $103
C)   $100 of inventory which is discounted and sold for $97 cash today
D)   $100 of inventory that is sold today for $100 cash
E)   $100 accounts receivable that will be collected in full next weekF) A) and C)
G) A) and B)

Question 17

Which one of the following is included in a firm's market value but yet is excluded from the firm's accounting value?

Accepted Answer

A)   real estate investment
B)   good reputation of the company
C)   equipment owned by the firm
D)   money due from a customer
E)   an item held by the firm for future saleF) D) and E)
G) C) and D)

Question 18

Which one of the following must be true if a firm had a negative cash flow from assets?

Accepted Answer

A)   The firm borrowed money.
B)   The firm acquired new fixed assets.
C)   The firm had a net loss for the period.
D)   The firm utilized outside funding.
E)   Newly issued shares of stock were sold.F) B) and E)
G) C) and D)

Question 19

The Daily News had net income of $121,600 of which 40 percent was distributed to the shareholders as dividends.During the year,the company sold $75,000 worth of common stock.What is the cash flow to stockholders?

Accepted Answer

A)   -$75,000
B)   -$26,360
C)   -$2,040
D)   $123,640
E)   $147,960F) B) and C)
G) A) and B)

Question 20

The cash flow related to interest payments less any net new borrowing is called the:

Accepted Answer

A)   operating cash flow.
B)   capital spending cash flow.
C)   net working capital.
D)   cash flow from assets.
E)   cash flow to creditors.F) C) and D)
G) A) and B)

Exam 2: Financial Statements, Taxes, and Cash Flowpart Two: Financial Statements and Long-Term Financial Planning

Net capital spending:

Correct Answer
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Shareholders' equity:

Correct Answer
verified

The cash flow of a firm which is available for distribution to the firm's creditors and stockholders is called the:

Correct Answer
verified

Net working capital is defined as:

Correct Answer
verified

The Daily News had net income of $121,600 of which 40 percent was distributed to the shareholders as dividends.During the year,the company sold $75,000 worth of common stock.What is the cash flow to stockholders?

Correct Answer
verified

Which one of the following costs is most apt to be a fixed cost?

Correct Answer
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Noncash items refer to:

Correct Answer
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Which one of the following accounts is the most liquid?

Correct Answer
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Which one of the following must be true if a firm had a negative cash flow from assets?

Correct Answer
verified

Which one of the following is included in a firm's market value but yet is excluded from the firm's accounting value?

Correct Answer
verified

The tax rates are as shown.Nevada Mining currently has taxable income of $97,800.How much additional tax will the firm owe if taxable income increases by $21,000?

Correct Answer
verified

The cash flow related to interest payments less any net new borrowing is called the:

Correct Answer
verified

Which of the following are current assets? I.patent II.inventory III.accounts payable IV.cash

Correct Answer
verified

Which one of the following represents the most liquid asset?

Correct Answer
verified

Which one of these is most apt to be a fixed cost?

Correct Answer
verified

A firm has $520 in inventory,$1,860 in fixed assets,$190 in accounts receivables,$210 in accounts payable,and $70 in cash.What is the amount of the current assets?

Correct Answer
verified

Webster World has sales of $12,900,costs of $5,800,depreciation expense of $1,100,and interest expense of $700.What is the operating cash flow if the tax rate is 32 percent?

Correct Answer
verified

Correct Answer
verified

Which of the following is (are) included in the market value of a firm but are excluded from the firm's book value? I.value of management skills II.value of a copyright III.value of the firm's reputation IV.value of employee's experience

Correct Answer
verified

The common set of standards and procedures by which audited financial statements are prepared is known as the:

Correct Answer
verified

Exam 2: Financial Statements, Taxes, and Cash Flowpart Two: Financial Statements and Long-Term Financial Planning

Net capital spending:

Correct AnswerverifiedShow Answer

Shareholders' equity:

Correct AnswerverifiedShow Answer

The cash flow of a firm which is available for distribution to the firm's creditors and stockholders is called the:

Correct AnswerverifiedShow Answer

Net working capital is defined as:

Correct AnswerverifiedShow Answer

The Daily News had net income of $121,600 of which 40 percent was distributed to the shareholders as dividends.During the year,the company sold $75,000 worth of common stock.What is the cash flow to stockholders?

Correct AnswerverifiedShow Answer

Which one of the following costs is most apt to be a fixed cost?

Correct AnswerverifiedShow Answer

Noncash items refer to:

Correct AnswerverifiedShow Answer

Which one of the following accounts is the most liquid?

Correct AnswerverifiedShow Answer

Which one of the following must be true if a firm had a negative cash flow from assets?

Correct AnswerverifiedShow Answer

Which one of the following is included in a firm's market value but yet is excluded from the firm's accounting value?

Correct AnswerverifiedShow Answer

The tax rates are as shown.Nevada Mining currently has taxable income of $97,800.How much additional tax will the firm owe if taxable income increases by $21,000?

Correct AnswerverifiedShow Answer

The cash flow related to interest payments less any net new borrowing is called the:

Correct AnswerverifiedShow Answer

Which of the following are current assets? I.patent II.inventory III.accounts payable IV.cash

Correct AnswerverifiedShow Answer

Which one of the following represents the most liquid asset?

Correct AnswerverifiedShow Answer

Which one of these is most apt to be a fixed cost?

Correct AnswerverifiedShow Answer

A firm has $520 in inventory,$1,860 in fixed assets,$190 in accounts receivables,$210 in accounts payable,and $70 in cash.What is the amount of the current assets?

Correct AnswerverifiedShow Answer

Webster World has sales of $12,900,costs of $5,800,depreciation expense of $1,100,and interest expense of $700.What is the operating cash flow if the tax rate is 32 percent?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is (are) included in the market value of a firm but are excluded from the firm's book value? I.value of management skills II.value of a copyright III.value of the firm's reputation IV.value of employee's experience

Correct AnswerverifiedShow Answer

The common set of standards and procedures by which audited financial statements are prepared is known as the:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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