Question 1

Given the information below,calculate the company's cash balance at the end of the year.

Accepted Answer

The answer of Given the information below,calculate the company's cash...

Question 2

Please refer to Table 3-1 for the following questions.
Table 3-1
Jones Company
Financial Information
 
-Based on the information in Table 3-1,assuming that no common stock was repurchased during the year,the firm issued how much new common stock during 2010?

Accepted Answer

A) $500 
B) $1,000 
C) $1,500 
D) $2,000

Question 3

In order to be conservative,accrual accounting requires that expenses be recorded when incurred,but revenues are recorded only after the cash has been received.

Accepted Answer

A) True 
 B)False

Question 4

Given the following financial statements for ACME Corporation,what amount did the company pay in dividends for 2010?

Accepted Answer

A) $45,000 
B) $25,000 
C) $100,000 
D) $80,000

Question 5

Additional Paid in Capital on the balance sheet equals the amount paid by investors for the company's common stock that exceeds the market price of the stock at the time of purchase.

Accepted Answer

A) True 
 B)False

Question 6

Fixed assets are assets whose balances will remain the same throughout the year.

Accepted Answer

A) True 
 B)False

Question 7

All of the following would result in an increase in stockholders equity EXCEPT

Accepted Answer

A) the company sold common stock at par value. 
B) the company sold common stock above par value. 
C) the company purchased treasury stock. 
D) the company had positive net income greater than dividends paid.

Question 8

Intangible assets such as copyrights and goodwill are not included on the balance sheet because they are impossible to value objectively.

Accepted Answer

A) True 
 B)False

Question 9

A corporation has annual sales of $18 million,total assets of $4 million,a debt ratio of 40%,depreciation expense of $200,000,and a tax rate of 40%.The corporation's total stockholders' equity is equal to

Accepted Answer

A) $5,600,000. 
B) $2,800,000. 
C) $2,400,000. 
D) $1,800,000.

Question 10

Rogue Industries reported the following items for the current year: Sales = $3,000,000; Cost of Goods Sold = $1,500,000; Depreciation Expense = $170,000; Administrative Expenses = $150,000; Interest Expense = $30,000; Marketing Expenses = $80,000; and Taxes = $300,000.Rogue's net profit margin is equal to

Accepted Answer

A) 25.67%. 
B) 35.67%. 
C) 36.67%. 
D) 50.00%.

Question 11

The more debt a company uses to finance its assets,the lower will be its operating income due to higher interest expense.

Accepted Answer

A) True 
 B)False

Question 12

A firm paid dividends of $10,000,paid interest of $20,000,reduced debt principal outstanding (paid off debt)in the amount of $100,000,and sold new stock for $150,000.What was the firm's cash flow from financing activities?

Accepted Answer

A) +$20,000 ($20,000 flowed into the firm) 
B) -$20,000 ($20,000 flowed out of the firm) 
C) +$280,000 ($280,000 flowed into the firm) 
D) -$280,000 ($280,000 flowed out of the firm)

Question 13

An income statement reports the firm's revenues and expenses for a specific period of time such as one year.

Accepted Answer

A) True 
 B)False

Question 14

The increase in owners equity for a given period is equal to

Accepted Answer

A) positive net cash flow minus dividends. 
B) net income minus dividends. 
C) sales minus dividends. 
D) gross profit minus distributions to shareholders.

Question 15

According to accrual accounting,revenues are recognized when earned and expenses are recognized when incurred.

Accepted Answer

A) True 
 B)False

Question 16

Net working capital is equal to gross working capital minus depreciation.

Accepted Answer

A) True 
 B)False

Question 17

Net profit margin is equal to the gross profit margin times the operating profit margin.

Accepted Answer

A) True 
 B)False

Question 18

Common stockholders' equity equals common stock issued minus treasury stock.

Accepted Answer

A) True 
 B)False

Question 19

The profit and loss (income)statement is compiled on a cash basis.

Accepted Answer

A) True 
 B)False

Question 20

Owners equity increases each period by the amount of the corporation's positive net cash flow.

Accepted Answer

A) True 
 B)False

Exam 3: Understanding Financial Statements and Cash Flows

Given the information below,calculate the company's cash balance at the end of the year.

Please refer to Table 3-1 for the following questions. Table 3-1 Jones Company Financial Information -Based on the information in Table 3-1,assuming that no common stock was repurchased during the year,the firm issued how much new common stock during 2010?

In order to be conservative,accrual accounting requires that expenses be recorded when incurred,but revenues are recorded only after the cash has been received.

Given the following financial statements for ACME Corporation,what amount did the company pay in dividends for 2010?

Additional Paid in Capital on the balance sheet equals the amount paid by investors for the company's common stock that exceeds the market price of the stock at the time of purchase.

Fixed assets are assets whose balances will remain the same throughout the year.

All of the following would result in an increase in stockholders equity EXCEPT

Intangible assets such as copyrights and goodwill are not included on the balance sheet because they are impossible to value objectively.

A corporation has annual sales of $18 million,total assets of $4 million,a debt ratio of 40%,depreciation expense of $200,000,and a tax rate of 40%.The corporation's total stockholders' equity is equal to

The more debt a company uses to finance its assets,the lower will be its operating income due to higher interest expense.

A firm paid dividends of $10,000,paid interest of $20,000,reduced debt principal outstanding (paid off debt) in the amount of $100,000,and sold new stock for $150,000.What was the firm's cash flow from financing activities?

An income statement reports the firm's revenues and expenses for a specific period of time such as one year.

The increase in owners equity for a given period is equal to

According to accrual accounting,revenues are recognized when earned and expenses are recognized when incurred.

Net working capital is equal to gross working capital minus depreciation.

Net profit margin is equal to the gross profit margin times the operating profit margin.

Common stockholders' equity equals common stock issued minus treasury stock.

The profit and loss (income)statement is compiled on a cash basis.

Owners equity increases each period by the amount of the corporation's positive net cash flow.