Question 1

The balance sheet describes the financial position of a firm on a given date.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following would NOT be included as an asset on a corporate balance sheet?

Accepted Answer

A) Accounts receivable 
B) Common stock 
C) Inventory 
D) Buildings 
A) Accounts receivable 
B) Common stock 
C) Inventory 
D) Buildings B

Question 3

Cash flows from assets will always be less than cash flows from financing due to dividends.

Accepted Answer

A) True 
 B)False  False

Question 4

An advantage of balance sheet numbers is that assets reflect current market values.

Accepted Answer

A) True 
 B)False

Question 5

Your firm has the following income statement items: sales of $50,250,000;income tax of $1,744,000;operating expenses of $10,115,000;cost of goods sold of $35,025,000;and interest expense of $750,000.What is the amount of the firm's gross profit?

Accepted Answer

A) $18,000,000 
B) $15,225,000 
C) $5,000,110 
D) $6,632,000 
A) $18,000,000 
B) $15,225,000 
C) $5,000,110 
D) $6,632,000

Question 6

-Browning Cookware,Inc.has the following income statement items: sales of $50,250,000;operating expenses of $10,115,000;cost of goods sold of $35,025,000;and interest expense of $750,000.If the firm's income tax rate is 34%,what is the amount of the firm's income tax liability?

Accepted Answer

A) $1,665,000 
B) $725,000 
C) $385,000 
D) $1,482,400 
A) $1,665,000 
B) $725,000 
C) $385,000 
D) $1,482,400

Question 7

Fixed assets includes which of the below?

Accepted Answer

A) Inventory 
B) Patents 
C) Land 
D) Copyrights 
A) Inventory 
B) Patents 
C) Land 
D) Copyrights

Question 8

-Based on the information given in Table 1,calculate the dividends paid in 1996.

Accepted Answer

A) $3,750 
B) $3,000 
C) $750 
D) $2,250 
A) $3,750 
B) $3,000 
C) $750 
D) $2,250

Question 9

Free cash flow will increase with a decrease in ________.

Accepted Answer

A) tax rate 
B) accruals 
C) depreciation expense 
D) both A and C 
A) tax rate 
B) accruals 
C) depreciation expense 
D) both A and C

Question 10

Which of the following is NOT included in operating income?

Accepted Answer

A) Cost of goods sold 
B) Sales 
C) Taxes 
D) Operating expenses 
A) Cost of goods sold 
B) Sales 
C) Taxes 
D) Operating expenses

Question 11

Which of the following best represents the stream of income that is available to common stockholders?

Accepted Answer

A) Net profit after tax and after preferred dividend payments 
B) Earnings before interest and taxes 
C) Gross profit 
D) Operating profit 
A) Net profit after tax and after preferred dividend payments 
B) Earnings before interest and taxes 
C) Gross profit 
D) Operating profit

Question 12

Which of the following would be included in the calculation of net operating working capital?

Accepted Answer

A) Accounts payable 
B) Accruals 
C) Short-term notes payable 
D) Both A and B 
E) All of the above 
A) Accounts payable 
B) Accruals 
C) Short-term notes payable 
D) Both A and B 
E) All of the above

Question 13

Grass Gadgets had sales of $30 million and net income of $2 million in 2008.Grass paid a dividend of $1.5 million.Assuming that their beginning balance for retained earnings was $3 million,calculate their ending balance for retained earnings.

Accepted Answer

A) $2.5 million 
B) $3 million 
C) $3.5 million 
D) $4 million 
A) $2.5 million 
B) $3 million 
C) $3.5 million 
D) $4 million

Question 14

Which of the following represents an attempt to measure the earnings of the firm's operations over a given time period?

Accepted Answer

A) Balance sheet 
B) Cash flow statement 
C) Income statement 
D) None of the above 
A) Balance sheet 
B) Cash flow statement 
C) Income statement 
D) None of the above

Question 15

What is sales revenue,minus cost of goods sold and operating expenses,known as for income statement purposes?

Accepted Answer

A) Net profit 
B) Retained earnings 
C) Net income available to preferred shareholders 
D) EBIT 
A) Net profit 
B) Retained earnings 
C) Net income available to preferred shareholders 
D) EBIT

Question 16

Which of the following is the least liquid current asset?

Accepted Answer

A) Accruals 
B) Marketable securities 
C) Accounts receivable 
D) Inventory 
A) Accruals 
B) Marketable securities 
C) Accounts receivable 
D) Inventory

Question 17

Which of the basic financial statements is best used to answer the question,"How profitable is the business?"

Accepted Answer

A) Balance sheet 
B) Statement of shareholder's equity 
C) Income statement 
D) Accounts receivable aging schedule 
A) Balance sheet 
B) Statement of shareholder's equity 
C) Income statement 
D) Accounts receivable aging schedule

Question 18

The balance sheet provides a statement of the firm's financial position.

Accepted Answer

A) True 
 B)False

Question 19

Use the following information to answer the following question(s).
In 2004,A & K,Inc.expects operating income (earnings before interest and taxes)of $18,000,000.In addition,the corporation has $20,000,000 of debt outstanding with a 10 percent interest rate and will pay $1,000,000 in dividends to its common stockholders.
-A & K's marginal tax rate for 2004 will be:

Accepted Answer

A) 38 percent. 
B) 35 percent. 
C) 34 percent. 
D) unknown because too little information is provided. 
A) 38 percent. 
B) 35 percent. 
C) 34 percent. 
D) unknown because too little information is provided.

Question 20

-From the scrambled list of items presented in Table 4,prepare an income statement and a balance sheet for Dooley Sportswear Company.

Accepted Answer

The answer of  
-From the scrambled list of items...

The balance sheet describes the financial position of a firm on a given date.

Which of the following would NOT be included as an asset on a corporate balance sheet?

Cash flows from assets will always be less than cash flows from financing due to dividends.

An advantage of balance sheet numbers is that assets reflect current market values.

Your firm has the following income statement items: sales of $50,250,000;income tax of $1,744,000;operating expenses of $10,115,000;cost of goods sold of $35,025,000;and interest expense of $750,000.What is the amount of the firm's gross profit?

-Browning Cookware,Inc.has the following income statement items: sales of $50,250,000;operating expenses of $10,115,000;cost of goods sold of $35,025,000;and interest expense of $750,000.If the firm's income tax rate is 34%,what is the amount of the firm's income tax liability?

Fixed assets includes which of the below?

-Based on the information given in Table 1,calculate the dividends paid in 1996.

Free cash flow will increase with a decrease in ________.

Which of the following is NOT included in operating income?

Which of the following best represents the stream of income that is available to common stockholders?

Which of the following would be included in the calculation of net operating working capital?

Grass Gadgets had sales of $30 million and net income of $2 million in 2008.Grass paid a dividend of $1.5 million.Assuming that their beginning balance for retained earnings was $3 million,calculate their ending balance for retained earnings.

Which of the following represents an attempt to measure the earnings of the firm's operations over a given time period?

What is sales revenue,minus cost of goods sold and operating expenses,known as for income statement purposes?

Which of the following is the least liquid current asset?

Which of the basic financial statements is best used to answer the question,"How profitable is the business?"

The balance sheet provides a statement of the firm's financial position.

-From the scrambled list of items presented in Table 4,prepare an income statement and a balance sheet for Dooley Sportswear Company.

Getting Started-Principles of Finance

Firms and the Financial Market

Financial Analysis-Sizing up Firm Performance

Time Value of Money-The Basics

The Time Value of Money-Annuities and Other Topics

An Introduction to Risk and Return-History of Financial Market Returns

Risk and Return-Capital Market Theory

Debt Valuation and Interest Rates

Stock Valuation

Investment Decision Criteria

Analyzing Project Cash Flows

Risk Analysis and Project Evaluation

The Cost of Capital

Capital Structure Policy

Dividend Policy

Financial Forecasting and Planning

Working Capital Management

International Business Finance

Corporate Risk Management

Filters

Exam 3: Understanding Financial Statements, taxes, and Cash Flows

The balance sheet describes the financial position of a firm on a given date.

Which of the following would NOT be included as an asset on a corporate balance sheet?

Cash flows from assets will always be less than cash flows from financing due to dividends.

An advantage of balance sheet numbers is that assets reflect current market values.

Your firm has the following income statement items: sales of $50,250,000;income tax of $1,744,000;operating expenses of $10,115,000;cost of goods sold of $35,025,000;and interest expense of $750,000.What is the amount of the firm's gross profit?

-Browning Cookware,Inc.has the following income statement items: sales of $50,250,000;operating expenses of $10,115,000;cost of goods sold of $35,025,000;and interest expense of $750,000.If the firm's income tax rate is 34%,what is the amount of the firm's income tax liability?

Fixed assets includes which of the below?

-Based on the information given in Table 1,calculate the dividends paid in 1996.

Free cash flow will increase with a decrease in ________.

Which of the following is NOT included in operating income?

Which of the following best represents the stream of income that is available to common stockholders?

Which of the following would be included in the calculation of net operating working capital?

Grass Gadgets had sales of $30 million and net income of $2 million in 2008.Grass paid a dividend of $1.5 million.Assuming that their beginning balance for retained earnings was $3 million,calculate their ending balance for retained earnings.

Which of the following represents an attempt to measure the earnings of the firm's operations over a given time period?

What is sales revenue,minus cost of goods sold and operating expenses,known as for income statement purposes?

Which of the following is the least liquid current asset?

Which of the basic financial statements is best used to answer the question,"How profitable is the business?"

The balance sheet provides a statement of the firm's financial position.

-From the scrambled list of items presented in Table 4,prepare an income statement and a balance sheet for Dooley Sportswear Company.

Getting Started-Principles of Finance

Firms and the Financial Market

Financial Analysis-Sizing up Firm Performance

Time Value of Money-The Basics

The Time Value of Money-Annuities and Other Topics

An Introduction to Risk and Return-History of Financial Market Returns

Risk and Return-Capital Market Theory

Debt Valuation and Interest Rates

Stock Valuation

Investment Decision Criteria

Analyzing Project Cash Flows

Risk Analysis and Project Evaluation

The Cost of Capital

Capital Structure Policy

Dividend Policy

Financial Forecasting and Planning

Working Capital Management

International Business Finance

Corporate Risk Management

Filters