Trading on the NYSE is executed without a specialist (i.e. a market maker). (T/F)
F
Stocks and bonds are two types of financial instruments (T/F)
... [Show More] True
The matching principle in accrual accounting requires that:
a. Revenues be recognized when the earnings process is complete and matches expenses to revenues recognized.
b. Expenses are matched to the year in which they are incurred
c. Revenues are matched to the year in which they are booked
d. Revenues should be large enough to match expenses
a
A high-quality customer just purchased $500,000 worth of product from your company. The contract calls for immediate delivery of the product with a cash payment of $300,000 today and $200,000 to be paid 60 days. The expense associated with the product is $300,000, of which $100,000 has not been paid to your supplier. Under accrual based accounting system, you will most likely report
a. revenues of $300,000 and expenses of $300,000.
b. revenues of $300,000 and expenses of $200,000.
c. revenues of $500,000 and expenses of $300,000.
d. revenues of $500,000 and expenses of $200,000.
c
A firm reported retained earnings of $300 in 12/31/20x2. For 12/31/20x3, the firm reports retained earnings of $400 and pays dividends of $25. What was net income in 20x3
a. 300
b. 400
c. 125
d. 100
c
A basic equation for the balance sheet is:
a. Equity = Assets - Liabilities
b. Liabilities = Equity + Assets
c. Assets = Liabilities - Equity
d. Assets = Equity - Liabilities
a
Why is the Balance Sheet known as a permanent statement?
a. Because the statement is sent to the SEC.
b. Because the other statements are reset at the end of the fiscal year
c. Because it is printed out and archived
d. Because it persists in the minds of the shareholders.
b
How do you calculate the change in Retained Earnings?
a. Ending Retained Earnings - Change in Cash
b. EBIT divided by Total Assets + Dividends
c. EBIT - Change in Cash - Dividends
d. Net Income - Dividends
d
Which of the following is generally true?
a. Gross Profit and Operating Income are the same
b. Cost of Goods Sold + Operating Expenses = Net Income
c. Operating Income and EBIT are the same
d. EBIT + Income Taxes = Net income
c
Which components are part of total assets?
a. Cash, Accounts Receivable, Short Term Debt
b. Cash Accounts Receivable, Inventory, Long Term Assets
c. Accounts Payable, Long Term Assets, Long Term Debt
d. Accounts Payable, Net Income, Equity
b
Which components are part of current assets?
a. Cash, Accounts Receivable, Property Plant & Equipment
b. Accounts Receivable, Accounts Payable, Inventory
c. Long Term Debt, Property Plant & Equipment, Common Stock
d. Inventory, Cash, Accounts Receivable, Short Term Investments
d
Which components are part of Total Liabilities?
a. Accounts Payable, Accounts Receivable, Short Term Debt
b. Long Term Debt, Common Stock, Retained Earnings
c. Bonds, Accounts Payable, Mortgage
d. Common Stock, Long Term Debt, Short Term Investments
c
Intel reported the following for 2014:
Net Income 100,000
Depreciation 20,000
Change in A/R 10,000
What is the cash flow from operating activities (CF0)?
a. 100,000
b. 110,000
c. 120,000
d. (130,000)
b
Intel reported the following for 2014:
Gross Equipment (1/1/14) 50,000
Gross Equipment (12/31/14) 65,000
Net income 100,000
Depreciation 20,000
What is the cash flow from investing activities for 2014?
a. 100,000
b. 80,000
c. (15,000)
d. 15,000
c
What is the Cash Flow from Operations given the following information?
Net Income 450,000
Change in Accounts Receivable 120,000
Change in Inventory - 90,000
Change in PP&E 60,000
Depreciation Expense 110,000
Change in Accounts Payable 50,000
Change in Accrued Expenses - 75,000
Change in Common Stock 300,000
a. $570,000
b. $410,000
c. $505,000
d. $375,000
c
When Fixed Assets increase what happens to Cash?
a. Cash stays the same
b. Cash increases
c. Cash decreases
d. Assets decrease
c
Last year a firm recorded Net PP&E of $4,600 while this year the same firm recorded Net PP&E of $4,500. If the depreciation expense for last year and this year are $500 and $800 respectively, what is the CFI of the company? (assume no asset disposals)
a. 100 outflow
b. 900 outflow
c. 100 inflow
d. 700 outflow
d
Which is the purpose of the statement of cash flows?
a. serves as the replacement for the income statement and balance sheet
b. explains the change in cash balance at one point in time
c. explains the change in cash balance for one period of time
d. both (a) and (b) above
c
. Financial data for Intel is given below for 2014:
• EBIT 1,000,000
• Depreciation 30,000
• Change in working capital (10,000)
• Net capital expenditures 15,000
• Tax rate 40%
Compute the Free Cash Flow for 2014
a. 610,000
b. 675,000
c. 625,000
d. 600,000
c
.A company has cash sales of 200 and credit sales of 750. It's average accounts receivable is 90. What is the A/R turnover? What is the Average Collection Period?
a. Turnover: 8.33 ACP: .694
b. Turnover: 10.56 ACP: 43.8
c. Turnover 8.33 ACP : 43.8
d. Turnover 10.56 ACP: 24.9
c
The OIROI (Operating Income Return on Investment) uses what elements on the income statement?
a. Operating Income, EBIT, Total Liabilities
b. EBIT, Total Assets
c. Sales, Total Assets, Equity
d. Net Margin, Total Current Assets
b
Why would a company be interested in the TAT(Total Asset Turnover) ratio?
a. How efficient assets are at producing income
b. What the turnover of sales is to liabilities
c. How efficient assets are at producing sales
d. How efficient assets are to liabilities and equity
c
If a company has current assets of 80 and fixed assets of 120, if Sales are 150 and EBIT is 35, what is the Fixed Asset Turnover?
a. 5.71
b. 2.29
c. 0.80
d. 1.25
d
If a company has current assets of 90 and fixed assets of 140, if it has debt of 125, what is its debt ratio?
a. 1.12
b. 0.54
c. 1.36
d. 1.84
b
A company has sales of 300, expenses of 200 and interest expense of 25, what is its Times Interest Earned ratio?
a. 2.00
b. 4.00
c. 1.75
d. 3.00
b
A couple wants to save up for a down payment on a house. They think they need to save 100,000 in five years. If the interest rate is 4% and they start at the end of the year when they both get bonuses from their employers, what do they have to put aside annually?
a. 22,096.37
b. 17,752.61
c. 15,962.84
d. 18,462.71
d
A person wants to put aside $500 at the beginning of each month for 10 years. If she estimates an interest rate of 5.5%, what will she have in her savings account at the end?
a. 86,437.68
b. 70,154.99
c. 80,118.33
d. 76,905.66
c [Show Less]
