Exam 3: Accounting and Finance

Which of the following statements is more likely if cash and marketable securities increase by $5,000 during a period in which cash provided by operations increases by $1,000 and cash used by investments decreases by $500?

Which one of the following best explains the combination of a high level of net income combined with a low level of cash flow during an accounting period?

According to the Canadian tax code at the beginning of 2013,the highest marginal tax rate for personal taxpayers is:

Which of these statements related to free cash flow is correct?

An increase in inventories uses cash,reducing the firm's net cash balance.

If net income is positive,then cash flow from operations must be positive for that period.

Revenue increases by $200 and the cost of goods sold is 78%.What dollar amount of extra taxes will be owed if the marginal tax rate is 35%?

In general,what is changing as you read down the left-hand side of a balance sheet?

Amy wants to know if inventory is increasing as a percentage of total assets.Which one of these statements most easily provides the information she is seeking?

Businesses that aggressively exploit any means possible to increase current earnings may cross over into fraudulent account practices.

A company may deduct the interest paid to debtholders and the dividends paid to shareholders when calculating its taxable income.

There is generally a bigger difference between the book value and the market value of fixed assets as compared to cash.

Accrual accounting aims to provide a fairer measure of the firm's profitability.

Dividends paid are treated as a financing activity on the statement of cash flows.

Assume a firm increases its revenue by $100 while increasing its cost of goods sold by $85.How much additional tax will the firm owe if its marginal tax rate is 25%?

Which of the following items should not be included in a listing of current assets?

Johnson's Nursery has net income of $42,500,depreciation expense of $1,800,interest expense of $900,taxes of $1,600,additions to net working capital of $2,300,and capital expenditures of $11,700.What is the amount of the free cash flow?

The income statement resembles a snapshot of the firm at a specific time.

What is the most likely conclusion for a firm whose statement of cash flows shows an increase in cash balances and has negative cash flows from both operations and financing?

The existence of goodwill on a corporate balance sheet indicates that the corporation has: