Exam 3: Accounting and Finance

Accounting practices are not standardized across countries.

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

Calculate the cash inflows (outflows) from investing activities if total cash decreased by $40,000; cash inflows from operating activities were $14,000 and cash outflows from financing activities were $60,000.

Which of the following forms of income can individuals defer from taxation?

What occurs when the value of a firm's debt exceeds the value of shareholders' equity?

Market-value balance sheets differ from book-value balance sheets in that market values:

When an accountant does not report all of the potentially relevant financial information on the firm's financial statements, the accountant is most likely:

Which of the following statements about net working capital (NWC) is correct?

Which of the firm's financial statements most clearly recognizes the payment for new equipment?

Why does accounting of income differ from cash flow?

An increase in the accounts receivable balance provides an increase in cash flow.

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?

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

Accrual accounting, which attempts to match sales revenues and the expenses associated with the production of the goods, is conducted in an attempt to:

What is the tax liability for an individual with $52,000 of income, which includes $2,000 of dividends, if the tax rate is 15 percent on income up to $25,350 and 28 percent on income over $25,350?

Which of the following statements is true for a corporation with $1 million market value of equity, $2 million market value of assets, and 1,000 shares of outstanding stock?

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

If a payment of principal is due in seven months on a long-term liability, that payment will appear on the current balance sheet now as a(n):

If a firm's net income is positive and its non-cash expenses are positive, which of the following could account for a negative amount of cash provided by operations?

What balancing entry is most likely to be called for if previously excluded intangible assets were added to a firm's balance sheet?