Question 1

Which one of the following is not a requirement imposed by the Sarbanes-Oxley Act?

Accepted Answer

A)  Accounting firms may not offer other services to companies they audit. 
B)  Any one individual is prohibited from serving as the chairman of a firm's board of directors for more than 5 years. 
C)  A board's audit committee must consist of directors who are independent of the firm's management. 
D)  Management must certify that the financial statements present a fair view of the firm's financial position. 
A)  Accounting firms may not offer other services to companies they audit. 
B)  Any one individual is prohibited from serving as the chairman of a firm's board of directors for more than 5 years. 
C)  A board's audit committee must consist of directors who are independent of the firm's management. 
D)  Management must certify that the financial statements present a fair view of the firm's financial position.

Question 2

What is the overall change in cash resulting from: $300 increase in inventories,$150 increase in accounts payable,$120 decrease in accounts receivable,$60 decrease in other current assets,$150 decrease in other current liabilities?

Accepted Answer

A)  −$120 
B)  −$240 
C)  $180 
D)  $120 
A)  −$120 
B)  −$240 
C)  $180 
D)  $120

Question 3

All items in the common-size balance sheet are expressed as a percentage of total assets.

Accepted Answer

A) True 
 B)False

Question 4

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 5

The balance sheet presents a snapshot of the firm's assets and liabilities at one particular moment.

Accepted Answer

A) True 
 B)False

Question 6

An expenditure on new capital equipment is a cash payment.

Accepted Answer

A) True 
 B)False

Question 7

A reduction in accounts receivable uses cash,reducing the firm's net cash balance.

Accepted Answer

A) True 
 B)False

Question 8

Which type of income is subject to "double taxation"?

Accepted Answer

A)  Dividends and wages 
B)  Capital gains 
C)  Dividends 
D)  Wages 
A)  Dividends and wages 
B)  Capital gains 
C)  Dividends 
D)  Wages

Question 9

Professor Diehard found an effective antibiotic for the DEPRESS bacteria,and patented the drug.He believes that he could sell the patent for $20 million.He then formed a corporation and invested $400,000 in setting up a production plant.There are 2 million shares of stock outstanding.If the professor's belief is correct,what would be the price per share and the book value per share?

Accepted Answer

A)  $10.20; $0.20 
B)  $10.00; $0.20 
C)  $9.80; $0.40 
D)  $9.80; $0.20 
A)  $10.20; $0.20 
B)  $10.00; $0.20 
C)  $9.80; $0.40 
D)  $9.80; $0.20

Question 10

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

Accepted Answer

A) True 
 B)False

Which one of the following is not a requirement imposed by the Sarbanes-Oxley Act?

What is the overall change in cash resulting from: $300 increase in inventories,$150 increase in accounts payable,$120 decrease in accounts receivable,$60 decrease in other current assets,$150 decrease in other current liabilities?

All items in the common-size balance sheet are expressed as a percentage of total assets.

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

The balance sheet presents a snapshot of the firm's assets and liabilities at one particular moment.

An expenditure on new capital equipment is a cash payment.

A reduction in accounts receivable uses cash,reducing the firm's net cash balance.

Which type of income is subject to "double taxation"?

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

Goals and Governance of the Firm

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 and Governance

Venture Capital, IPOs, and Seasoned Offerings

Debt Policy

Payout Policy

Long-Term Financial Planning

Short-Term Financial Planning

Working Capital Management

Mergers,Acquisitions,and Corporate Control

International Financial Management

Options

Risk Management

Filters

Exam 3: Accounting and Finance

Which one of the following is not a requirement imposed by the Sarbanes-Oxley Act?

What is the overall change in cash resulting from: $300 increase in inventories,$150 increase in accounts payable,$120 decrease in accounts receivable,$60 decrease in other current assets,$150 decrease in other current liabilities?

All items in the common-size balance sheet are expressed as a percentage of total assets.

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

The balance sheet presents a snapshot of the firm's assets and liabilities at one particular moment.

An expenditure on new capital equipment is a cash payment.

A reduction in accounts receivable uses cash,reducing the firm's net cash balance.

Which type of income is subject to "double taxation"?

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

Goals and Governance of the Firm

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 and Governance

Venture Capital, IPOs, and Seasoned Offerings

Debt Policy

Payout Policy

Long-Term Financial Planning

Short-Term Financial Planning

Working Capital Management

Mergers,Acquisitions,and Corporate Control

International Financial Management

Options

Risk Management

Filters