Question 1

Which one of the following financial statements shows a relationship between assets and liabilities plus owners' equity?

Accepted Answer

A)  income statement 
B)  statement of cash flows 
C)  balance sheet 
D)  statement of retained earnings 
A)  income statement 
B)  statement of cash flows 
C)  balance sheet 
D)  statement of retained earnings

Question 2

Net income is:

Accepted Answer

A)  equal to cash flow 
B)  profits remaining after income taxes are paid 
C)  unavailable to the owners of the business 
D)  net profit before taxes plus depreciation 
A)  equal to cash flow 
B)  profits remaining after income taxes are paid 
C)  unavailable to the owners of the business 
D)  net profit before taxes plus depreciation

Question 3

A firm's net income over some period is the same as its cash flow.

Accepted Answer

A) True 
 B)False

Question 4

Top finance officers in a corporation include:

Accepted Answer

A)  treasurer 
B)  chief operating officer 
C)  accounting clerks 
D)  chief lending officer 
A)  treasurer 
B)  chief operating officer 
C)  accounting clerks 
D)  chief lending officer

Question 5

Financial and physical items owned by a business.

Accepted Answer

A)  Income 
B)  Assets 
C)  Equity 
D)  Liabilities 
A)  Income 
B)  Assets 
C)  Equity 
D)  Liabilities

Question 6

Partnership income is taxed at the partnership income tax rate.

Accepted Answer

A) True 
 B)False

Question 7

Suppose Ningbo Steel had sales revenue of $11,000 sales revenue, cost of goods sold of $5,000, operating expenses of $3000, interest expense of $1,000, a tax rate of 20%, and 2,000 shares of common stock outstanding. Based on this information, earnings per share was:

Accepted Answer

A)  $1.20 
B)  $1.00 
C)  $0.80 
D)  $0.08 
E)  none of the above 
A)  $1.20 
B)  $1.00 
C)  $0.80 
D)  $0.08 
E)  none of the above

Question 8

All of the following accounts are considered to be current liabilities on the balance sheet except:

Accepted Answer

A)  depreciation 
B)  accounts payable 
C)  accruals 
D)  notes payable 
A)  depreciation 
B)  accounts payable 
C)  accruals 
D)  notes payable

Question 9

Computation of a firm's market value added (MVA) includes all of the following except:

Accepted Answer

A)  market value of stock 
B)  market value of debt 
C)  book value of debt 
D)  interest paid on debt 
A)  market value of stock 
B)  market value of debt 
C)  book value of debt 
D)  interest paid on debt

Question 10

Common-size financial statements express balance sheet and income statement numbers as a percent of sales.

Accepted Answer

A) True 
 B)False

Question 11

Subchapter S corporations issue stock.

Accepted Answer

A) True 
 B)False

Question 12

The most desirable form of business organization in terms of ease of start-up is a proprietorship.

Accepted Answer

A) True 
 B)False

Question 13

Limited partners face liability limited to their investment in the firm, but they can participate in the operations of the firm.

Accepted Answer

A) True 
 B)False

Question 14

The most desirable form of business organization from a liquidity standpoint is a limited liability company.

Accepted Answer

A) True 
 B)False

Question 15

The balance sheet equation or accounting identity can be written as: assets equal liabilities minus owners' equity.

Accepted Answer

A) True 
 B)False

Question 16

Ningbo Steel had year end 2011 and 2012 retained earnings balances of $5,000,000 and $6,000,000 respectively. The firm paid $100,000 of dividends in 2012. Based on this information, Ningbo Steel's net profit after taxes in 2012 was:

Accepted Answer

A)  $100,000 
B)  $900,000 
C)  $1,000,000 
D)  $1,100,000 
A)  $100,000 
B)  $900,000 
C)  $1,000,000 
D)  $1,100,000

Question 17

As long as the number of common stock shares outstanding does not change appreciably, the market's perception of the firm and of its management's actions appears in the firm's stock price.

Accepted Answer

A) True 
 B)False

Question 18

The rule-setting body, which authorizes generally accepted accounting principles is:

Accepted Answer

A)  GAAP 
B)  FASB 
C)  SEC 
D)  Federal Reserve System 
A)  GAAP 
B)  FASB 
C)  SEC 
D)  Federal Reserve System

Question 19

What is the main purpose of common-size financial statements?

Accepted Answer

A)  To remove the bias introduced by increasing revenue 
B)  To facilitate comparisons over time 
C)  To facilitate comparison between firms of different structure 
D)  To facilitate comparison between different-sized firms 
A)  To remove the bias introduced by increasing revenue 
B)  To facilitate comparisons over time 
C)  To facilitate comparison between firms of different structure 
D)  To facilitate comparison between different-sized firms

Question 20

Current liabilities would not include:

Accepted Answer

A)  accounts payable 
B)  notes payable 
C)  bonds 
D)  accruals 
A)  accounts payable 
B)  notes payable 
C)  bonds 
D)  accruals

Which one of the following financial statements shows a relationship between assets and liabilities plus owners' equity?

Net income is:

A firm's net income over some period is the same as its cash flow.

Top finance officers in a corporation include:

Financial and physical items owned by a business.

Partnership income is taxed at the partnership income tax rate.

Suppose Ningbo Steel had sales revenue of $11,000 sales revenue, cost of goods sold of $5,000, operating expenses of $3000, interest expense of $1,000, a tax rate of 20%, and 2,000 shares of common stock outstanding. Based on this information, earnings per share was:

All of the following accounts are considered to be current liabilities on the balance sheet except:

Computation of a firm's market value added (MVA) includes all of the following except:

Common-size financial statements express balance sheet and income statement numbers as a percent of sales.

Subchapter S corporations issue stock.

The most desirable form of business organization in terms of ease of start-up is a proprietorship.

Limited partners face liability limited to their investment in the firm, but they can participate in the operations of the firm.

The most desirable form of business organization from a liquidity standpoint is a limited liability company.

The balance sheet equation or accounting identity can be written as: assets equal liabilities minus owners' equity.

Ningbo Steel had year end 2011 and 2012 retained earnings balances of $5,000,000 and $6,000,000 respectively. The firm paid $100,000 of dividends in 2012. Based on this information, Ningbo Steel's net profit after taxes in 2012 was:

As long as the number of common stock shares outstanding does not change appreciably, the market's perception of the firm and of its management's actions appears in the firm's stock price.

The rule-setting body, which authorizes generally accepted accounting principles is:

What is the main purpose of common-size financial statements?

Current liabilities would not include:

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuations

Securities and Markets

Financial Return and Risk Concepts

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

Exam 13: Business Organization and Financial Data

Which one of the following financial statements shows a relationship between assets and liabilities plus owners' equity?

Net income is:

A firm's net income over some period is the same as its cash flow.

Top finance officers in a corporation include:

Financial and physical items owned by a business.

Partnership income is taxed at the partnership income tax rate.

Suppose Ningbo Steel had sales revenue of $11,000 sales revenue, cost of goods sold of $5,000, operating expenses of $3000, interest expense of $1,000, a tax rate of 20%, and 2,000 shares of common stock outstanding. Based on this information, earnings per share was:

All of the following accounts are considered to be current liabilities on the balance sheet except:

Computation of a firm's market value added (MVA) includes all of the following except:

Common-size financial statements express balance sheet and income statement numbers as a percent of sales.

Subchapter S corporations issue stock.

The most desirable form of business organization in terms of ease of start-up is a proprietorship.

Limited partners face liability limited to their investment in the firm, but they can participate in the operations of the firm.

The most desirable form of business organization from a liquidity standpoint is a limited liability company.

The balance sheet equation or accounting identity can be written as: assets equal liabilities minus owners' equity.

Ningbo Steel had year end 2011 and 2012 retained earnings balances of $5,000,000 and $6,000,000 respectively. The firm paid $100,000 of dividends in 2012. Based on this information, Ningbo Steel's net profit after taxes in 2012 was:

As long as the number of common stock shares outstanding does not change appreciably, the market's perception of the firm and of its management's actions appears in the firm's stock price.

The rule-setting body, which authorizes generally accepted accounting principles is:

What is the main purpose of common-size financial statements?

Current liabilities would not include:

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuations

Securities and Markets

Financial Return and Risk Concepts

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters