CHAPTER 2
Financial Statements, Taxes, and Cash Flow I. DEFINITIONS
Topic: BALANCE SHEET
1. The financial statement showing a firm's accounting value on a particular date is the:
A) Income statement.
B) Balance sheet.
C) Statement of cash flows.
D) Tax reconciliation statement.
E) Bank statement.
Answer: B
Topic: CURRENT AS名言英文
SETS
2. A current ast is:
A) An item currently owned by the firm.
B) An item that the firm expects to own within the next year.
C) An item currently owned by the firm that will convert to cash within the next 12 months.
D) The amount of cash on hand the firm currently shows on its balance sheet.
E) The market value of all the items currently owned by the firm.
Answer: C
Topic: LONG-TERM DEBT
3. The long-term debts of a firm are:
A) Liabilities that come due within the next 12 months.
B) Liabilities that do not come due for at least 12 months.
C) Liabilities owed to the firm's suppliers.
D) Liabilities owed to the firm's shareholders.
E) Liabilities the firm expects to incur within the next 12 months.
Answer: B
Topic: NET WORKING CAPITAL
4. Net working capital is defined as:
A) Total liabilities minus shareholders' equity.
B) Current liabilities minus shareholders' equity.
C) Fixed asts minus shareholders' equity.
D) Total asts minus total liabilities.
E) Current asts minus current liabilities.
Answer: E
Topic: LIQUID ASSETS
5. A(n) ______________ ast is one which can be quickly converted into cash without significant
loss in value.
A) current
B) fixed
C) intangible
D) liquid
E) long-ter赞美爱情的诗句
m
Answer: D
Topic: FINANCIAL LEVERAGE
6. Financial leverage refers to:
A) The amount of debt ud in a firm's capital structure.
B) The ratio of retained earnings to shareholders' equity.
C) The ratio of paid-in surplus to shareholders' equity.
D) The ratio of cost-of-goods-sold to total sales.
E) The amount of receivables prent in the firm's ast structure.
Answer: A
Topic: GAAP
7. The common t of standards and procedures by which audited financial statements are prepared is
known as:
A) The matching principle.
B) The cash flow identity.
C) Generally Accepted Accounting Principles (GAAP).
D) The Freedom of Information Act (FOIA).
E) The 1993 Omnibus Budget Reconciliation Act.
Answer: C
Topic: INCOME STATEMENT
8. The financial statement summarizing a firm's performance over a period of time is the:
A) Income statement.
B) Balance sheet.
C) Statement of cash flows.
D) Tax reconciliation statement.
E) Shareholders' equity sheet.
Answer: A
Topic: NONCASH ITEMS
9. Noncash items
A) The credit sales of a firm.
B) The accounts payable of a firm.
C) Expens incurred for the purcha of intangible fixed asts.
D) Expens charged against revenues that do not directly affect cash flow.
E) All accounts on the balance sheet other than cash on hand.
Answer: D
Topic: MARGINAL TAX RATES
10. Your ______________ tax rate is the amount of tax payable on the next dollar you earn.
A) deductable
B) residual
C) total
D) average
E) marginal
Answer: E
Topic: AVERAGE TAX RATES
11. Your ______________ tax rate measures the total taxes you pay divided by your taxable income.
A) deductable
B) residual
C) total
D) average
E) marginal
Answer: D
Topic: OPERATING CASH FLOW
12. ______________ refers to the cash flow 老师对学生评语
that results from the firm's ongoing, normal business
activities.
A) Operating cash flow
B) Capital spending
C) Net working capital
D) Cash flow from asts
E) Cash flow to creditors
Answer: A
Topic: CAPITAL SPENDING
13. ______________ refers to the net spending of the firm on fixed ast purchas.
A) Operating cash flow
B) Capital spending
C) Net working capital
D) Cash flow from asts
E) Cash flow to creditors
Answer: B
Topic: NET WORKING CAPITAL
14. ______________ refers to the difference between a firm's current asts and its current liabilities.
A) Operating cash flow
B) Capital spending
C) Net working capital
D) Cash flow from asts
E) Cash flow to creditors
Answer: C
Topic: CASH FLOW FROM ASSETS
15. ______________ refers to the net total cash flow of the firm accruing to its creditors and
stockholders.
A) Operating cash flow
B) Capital spending
C) Net working capital
D) Cash flow from asts
E) Cash flow to creditors
Answer: D
Topic: CASH FLOW TO CREDITORS
16. ______________ refers to the firm's interest payments less any net new borrowing.
A) Operating cash flow
B) Capital spending
C) Net working capital
D) Cash flow from asts
E) Cash flow to creditors
Answer: E
Topic: CASH FLOW TO STOCKHOLDERS
17. ______________ refers to the firm's dividend payments less any net new equity raid.
A) Operating cash flow
B) C四年级下册语文教学计划
apital spending
C) Net working capital
D) Cash flow from asts
E) Cash flow to stockholders
Answer: E
Topic: FREE CASH FLOW
18. Cash flow from asts is also known as the firm's ______________.
A) capital structure
B) equity structure
C) hidden cash flow
D) free cash flow
E) historical cash flow
Answer: D
Topic: EARNINGS PER SHARE
19. Earnings per share is equal to:
A) Net income divided by the total number of shares outstanding.
B) Net income divided by the par value of common stock.
C) Gross income multiplied by the par value of common stock.
D) Operating income divided by the par value of com独角鬼王
mon stock.
E) Net income divided by total stockholders' equity.
Answer: A
Topic: DIVIDENDS PER SHARE
20. Dividends per share is equal to:
A) Dividends paid divided by the par value of common stock.
B) Dividends孕期胎教故事大全
paid divided by the total number of shares outstanding.
C) Dividends paid divided by total stockholders' equity.
D) Dividends paid multiplied by the par value of common stock.
E) Dividends paid multiplied by the total number of shares outstanding.
Answer: B
II CONCEPTS
Topic: BALANCE SHEET IDE所见古诗的意思
NTITY
21. The balance sheet identity states that:
A) Current asts + Fixed asts = Total asts
B) Asts = Liabilities + Shareholders' equity
C) Current liabilities + Long-term debt = Total liabilities
D) Common stock + Paid-in surplus + Retained earnings = Shareholders' equity
E) Cash flow = Market value – Book value
Answer: B
Top脚背腱鞘炎
ic: CURRENT ASSETS
22. Which of the following is NOT typically characterized as a current ast?
A) Inventory
B) Cash on hand
C) Patents
D) Accounts receivable
E) Marketable curities
Answer: C
Topic: LIQUID ASSETS
23. Which of the following would most likely be considered the most liquid ast?
A) A share of IBM common stock
B) A bond issued by a municipal government
C) A piece of collectible artwork
D) A lot of commercial real estate
E) A share of Citibank preferred stock
Answer: A
Topic: ACCOUNTING STATEMENTS
24. Which of the following is a FALSE statement?
A) Accounting income is rarely equal to firm cash flow.
B) Accounting statements are usually prepared to match the timing of income and expens.
C) All public companies are required to file timely, audited financial statements for purpos of
public perusal.
D) The balance sheet tells investors exactly what the firm's market value is.
E) A进步的英文
sts are usually recorded on the balance sheet at their acquisition value.
Answer: D
Topic: NONCASH ITEMS
25. Which of the following income statement accounts is a non-cash item?
A) Wages and salaries
B) Interest expen
C) Cost of goods sold
D) Amortization of goodwill
E) Income taxes
Answer: D
Topic: NET CAPITAL 传递用英语怎么说
SPENDING
26. Suppo you have the 2002 income statement for a firm, along with the 12/31/2001 and 12/31/2002
balance sheets. How would you calculate net capital spending for 2002?
A) Ending net fixed asts (2002) minus beginning net fixed asts (2001) plus 2002 depreciation
B) Beginning net fixed asts (2001) minus ending net fixed asts (2002) plus 2002 depreciation
C) Beginning net fixed asts (2001) plus ending net fixed asts (2002) minus 2002 depreciation
D) Ending net fixed asts (2002) minus beginning net fixed asts (2001) plus 2002 taxes paid
E) Ending net fixed asts (2002) plus beginning net fixed asts (2001) minus 2002 taxes paid
Answer: A
Topic: FINANCIAL LEVERAGE
27. An decrea in the financial leverage of a firm as a result of a decrea in outstanding debt
______________ the potential reward to stockholders while ______________ the risk of financial distress or bankruptcy.
A) decreas; decreasing
B) increas; decreasing
C) increas; increasing
D) decreas; increasing
E) does not affect; increasing
Answer: A
