Question 1

According to the current U.S.tax code,the marginal tax rate for personal taxpayers in the highest levels of income is:

Accepted Answer

A)  25.0%. 
B)  28.0%. 
C)  35.0%. 
D)  39.6%. 
A)  25.0%. 
B)  28.0%. 
C)  35.0%. 
D)  39.6%. D

Question 2

Which of the following categories of a statement of cash flows is affected by the payment of interest expense?

Accepted Answer

A)  Cash flows from operations 
B)  Cash flows from noncash expenses 
C)  Cash flows from investments 
D) Cash flows from financing 
A)  Cash flows from operations 
B)  Cash flows from noncash expenses 
C)  Cash flows from investments 
D) Cash flows from financing A

Question 3

If the balance sheet of a firm indicates that total assets exceed current liabilities plus shareholders' equity,then the firm has:

Accepted Answer

A)  no retained earnings. 
B)  long-term debt. 
C)  no accumulated depreciation. 
D) current assets. 
A)  no retained earnings. 
B)  long-term debt. 
C)  no accumulated depreciation. 
D) current assets. B

Question 4

According to the statement of cash flows,cash flows from financing could be positive if:

Accepted Answer

A)  the firm repaid more debt than it added. 
B)  the firm added more debt than it repaid. 
C)  interest rates were low on outstanding debt. 
D) the firm sold portions of its plant and equipment. 
A)  the firm repaid more debt than it added. 
B)  the firm added more debt than it repaid. 
C)  interest rates were low on outstanding debt. 
D) the firm sold portions of its plant and equipment.

Question 5

The gathering of related revenues and expenses into the same period,regardless of when cash is actually received or paid,is:

Accepted Answer

A)  cash-basis accounting. 
B)  market-value accounting. 
C)  book-value accounting. 
D) accrual accounting. 
A)  cash-basis accounting. 
B)  market-value accounting. 
C)  book-value accounting. 
D) accrual accounting.

Question 6

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

Accepted Answer

A)  High depreciation expense 
B)  Reduction of inventory levels 
C)  Acquisition of equipment 
D) Increase in accounts payable 
A)  High depreciation expense 
B)  Reduction of inventory levels 
C)  Acquisition of equipment 
D) Increase in accounts payable

Question 7

Compute the total tax liability,the average tax rate,and the marginal tax rate for the following corporation: $1,000,000 in taxable income; 15% tax up to $50,000,25% up to $75,000,34% up to $100,000,39% over $100,000.

Accepted Answer

The answer of Compute the total tax liability,the average tax...

Question 8

If a firm's cash-flow statement shows that cash was used for investments,which of the following would seem most likely?

Accepted Answer

A)  The inventory balance increased. 
B)  Common stock was repurchased. 
C)  New machines were acquired. 
D) Cash dividends were paid. 
A)  The inventory balance increased. 
B)  Common stock was repurchased. 
C)  New machines were acquired. 
D) Cash dividends were paid.

Question 9

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

Accepted Answer

A)  hiding transactions from the shareholders. 
B)  using the discretion that is built into GAAP. 
C)  not following GAAP. 
D) not licensed to practice accounting. 
A)  hiding transactions from the shareholders. 
B)  using the discretion that is built into GAAP. 
C)  not following GAAP. 
D) not licensed to practice accounting.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

If market values of equity exceed book values of equity,then:

Accepted Answer

A)  equity has been depreciated too rapidly. 
B)  the firm uses accrual-based accounting. 
C)  profit potential is expected to be attractive. 
D) the firm is holding too much cash 
A)  equity has been depreciated too rapidly. 
B)  the firm uses accrual-based accounting. 
C)  profit potential is expected to be attractive. 
D) the firm is holding too much cash

Question 12

In which of the following asset accounts are you least likely to find a difference between market value and book value?

Accepted Answer

A)  Cash 
B)  Inventory 
C)  Land 
D) Shareholders' equity 
A)  Cash 
B)  Inventory 
C)  Land 
D) Shareholders' equity

Question 13

What information is contained in the balance sheet,income statement,and statement of cash flows?

Accepted Answer

Investors and other stakeholders in the

Question 14

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

Accepted Answer

A)  Balance sheet 
B)  Income statement 
C)  Statement of cash flows 
D) Statement of condition 
A)  Balance sheet 
B)  Income statement 
C)  Statement of cash flows 
D) Statement of condition

Question 15

Which of the following is not a typical reason for differences between profit and cash flow?

Accepted Answer

A)  Depreciation expense 
B)  Income taxes 
C)  Changing levels of accounts receivable 
D) Accrual accounting practices 
A)  Depreciation expense 
B)  Income taxes 
C)  Changing levels of accounts receivable 
D) Accrual accounting practices

Question 16

An asset's liquidity is determined by how readily the asset can be converted to an appropriate amount of cash.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following expenses cannot be used to reduce taxable corporate income?

Accepted Answer

A)  Cash dividends 
B)  Depreciation expense 
C)  Interest expense 
D) Administrative expenses 
A)  Cash dividends 
B)  Depreciation expense 
C)  Interest expense 
D) Administrative expenses

Question 18

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

Accepted Answer

A)  NWC is positive for all firms. 
B)  As NWC decreases, potential liquidity increases. 
C)  NWC excludes inventory, which is deemed illiquid. 
D) Decreases in NWC can increase the firm's risk 
A)  NWC is positive for all firms. 
B)  As NWC decreases, potential liquidity increases. 
C)  NWC excludes inventory, which is deemed illiquid. 
D) Decreases in NWC can increase the firm's risk

Question 19

Marginal tax rates are based on:

Accepted Answer

A)  net income. 
B)  total income. 
C)  an additional dollar of income. 
D) earnings before interest and taxes. 
A)  net income. 
B)  total income. 
C)  an additional dollar of income. 
D) earnings before interest and taxes.

Question 20

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

Accepted Answer

A)  The assets are more fully depreciated. 
B)  The assets are growing in value. 
C)  The assets are increasing in maturity. 
D) The assets are becoming less liquid. 
A)  The assets are more fully depreciated. 
B)  The assets are growing in value. 
C)  The assets are increasing in maturity. 
D) The assets are becoming less liquid.

Exam 3: Accounting and Finance

According to the current U.S.tax code,the marginal tax rate for personal taxpayers in the highest levels of income is:

Which of the following categories of a statement of cash flows is affected by the payment of interest expense?

If the balance sheet of a firm indicates that total assets exceed current liabilities plus shareholders' equity,then the firm has:

According to the statement of cash flows,cash flows from financing could be positive if:

The gathering of related revenues and expenses into the same period,regardless of when cash is actually received or paid,is:

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

Compute the total tax liability,the average tax rate,and the marginal tax rate for the following corporation: $1,000,000 in taxable income; 15% tax up to $50,000,25% up to $75,000,34% up to $100,000,39% over $100,000.

If a firm's cash-flow statement shows that cash was used for investments,which of the following would seem most likely?

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

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

If market values of equity exceed book values of equity,then:

In which of the following asset accounts are you least likely to find a difference between market value and book value?

What information is contained in the balance sheet,income statement,and statement of cash flows?

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

Which of the following is not a typical reason for differences between profit and cash flow?

An asset's liquidity is determined by how readily the asset can be converted to an appropriate amount of cash.

Which of the following expenses cannot be used to reduce taxable corporate income?

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

Marginal tax rates are based on:

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

Goals and Governance of the Corporation

Financial Markets and Institutions

Measuring Corporate Performance

The Time Value of Money

Valuing Bonds

Valuing Stocks

Net Present Value and Other Investment Criteria

Using Discounted Cash-Flow Analysis to Make Investment Decisions

Project Analysis

Introduction to Risk,Return,and the Opportunity Cost of Capital

Risk,Return,and Capital Budgeting

The Weighted-Average Cost of Capital and Company Valuation

Introduction to Corporate Financing

How Corporations Raise Venture Capital and Issue Securities

Debt Policy

Payout Policy

Long-Term Financial Planning

Short-Term Financial Planning

Risk, Return, and Capital Budgeting

Mergers, Acquisitions, and Corporate Control

International Financial Management

Options

Risk Management

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