财务管理Chap002.docx

财务管理Chap002.docx

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财务管理Chap002

Chapter02

FinancialStatementsandCashFlow

MultipleChoiceQuestions

1. Thefinancialstatementshowingafirm'saccountingvalueonaparticulardateisthe:

A. incomestatement.

B. balancesheet.

C. statementofcashflows.

D. taxreconciliationstatement.

E. shareholders'equitysheet.

2. Acurrentassetis:

A. anitemcurrentlyownedbythefirm.

B. anitemthatthefirmexpectstoownwithinthenextyear.

C. anitemcurrentlyownedbythefirmthatwillconverttocashwithinthenext12months.

D. theamountofcashonhandthefirmcurrentlyshowsonitsbalancesheet.

E. themarketvalueofallitemscurrentlyownedbythefirm.

3. Thelong-termdebtsofafirmareliabilities:

A. thatcomeduewithinthenext12months.

B. thatdonotcomedueforatleast12months.

C. owedtothefirm'ssuppliers.

D. owedtothefirm'sshareholders.

E. thefirmexpectstoincurwithinthenext12months.

4. Networkingcapitalisdefinedas:

A. totalliabilitiesminusshareholders'equity.

B. currentliabilitiesminusshareholders'equity.

C. fixedassetsminuslong-termliabilities.

D. totalassetsminustotalliabilities.

E. currentassetsminuscurrentliabilities.

5. A（n）____assetisonewhichcanbequicklyconvertedintocashwithoutsignificantlossinvalue. 

A. current

B. fixed

C. intangible

D. liquid

E. long-term

6. Thefinancialstatementsummarizingafirm'saccountingperformanceoveraperiodoftimeisthe:

A. incomestatement.

B. balancesheet.

C. statementofcashflows.

D. taxreconciliationstatement.

E. shareholders'equitysheet.

7. Noncashitemsreferto:

A. thecreditsalesofafirm.

B. theaccountspayableofafirm.

C. thecostsincurredforthepurchaseofintangiblefixedassets.

D. expenseschargedagainstrevenuesthatdonotdirectlyaffectcashflow.

E. allaccountsonthebalancesheetotherthancashonhand.

8. Your_____taxrateistheamountoftaxpayableonthenexttaxabledollaryouearn. 

A. deductible

B. residual

C. total

D. average

E. marginal

9. Your_____taxrateisthetotaltaxesyoupaydividedbyyourtaxableincome. 

A. deductible

B. residual

C. total

D. average

E. marginal

10. _____referstothecashflowthatresultsfromthefirm'songoing,normalbusinessactivities. 

A. Cashflowfromoperatingactivities

B. Capitalspending

C. Networkingcapital

D. Cashflowfromassets

E. Cashflowtocreditors

11. _____referstothechangesinnetcapitalassets. 

A. Operatingcashflow

B. Cashflowfrominvesting

C. Networkingcapital

D. Cashflowfromassets

E. Cashflowtocreditors

12. _____referstothedifferencebetweenafirm'scurrentassetsanditscurrentliabilities. 

A. Operatingcashflow

B. Capitalspending

C. Networkingcapital

D. Cashflowfromassets

E. Cashflowtocreditors

13. _____iscalculatedbyaddingbacknoncashexpensestonetincomeandadjustingforchangesincurrentassetsandliabilities. 

A. Operatingcashflow

B. Capitalspending

C. Networkingcapital

D. Cashflowfromoperations

E. Cashflowtocreditors

14. _____referstothefirm'sinterestpaymentslessanynetnewborrowing. 

A. Operatingcashflow

B. Capitalspending

C. Networkingcapital

D. Cashflowfromshareholders

E. Cashflowtocreditors

15. _____referstothefirm'sdividendpaymentslessanynetnewequityraised. 

A. Operatingcashflow

B. Capitalspending

C. Networkingcapital

D. Cashflowfromcreditors

E. Cashflowtostockholders

16. Earningspershareisequalto:

A. netincomedividedbythetotalnumberofsharesoutstanding.

B. netincomedividedbytheparvalueofthecommonstock.

C. grossincomemultipliedbytheparvalueofthecommonstock.

D. operatingincomedividedbytheparvalueofthecommonstock.

E. netincomedividedbytotalshareholders'equity.

17. Dividendspershareisequaltodividendspaid:

A. dividedbytheparvalueofcommonstock.

B. dividedbythetotalnumberofsharesoutstanding.

C. dividedbytotalshareholders'equity.

D. multipliedbytheparvalueofthecommonstock.

E. multipliedbythetotalnumberofsharesoutstanding.

18. Whichofthefollowingareincludedincurrentassets?

I.equipment

II.inventory

III.accountspayable

IV.cash 

A. IIandIVonly

B. IandIIIonly

C. I,II,andIVonly

D. IIIandIVonly

E. II,III,andIVonly

19. Whichofthefollowingareincludedincurrentliabilities?

I.notepayabletoasupplierineighteenmonths

II.debtpayabletoamortgagecompanyinninemonths

III.accountspayabletosuppliers

IV.loanpayabletothebankinfourteenmonths 

A. IandIIIonly

B. IIandIIIonly

C. IIIandIVonly

D. II,III,andIVonly

E. I,II,andIIIonly

20. Anincreaseintotalassets:

A. meansthatnetworkingcapitalisalsoincreasing.

B. requiresaninvestmentinfixedassets.

C. meansthatshareholders'equitymustalsoincrease.

D. mustbeoffsetbyanequalincreaseinliabilitiesandshareholders'equity.

E. canonlyoccurwhenafirmhaspositivenetincome.

21. Whichoneofthefollowingassetsisgenerallythemostliquid?

A. inventory

B. buildings

C. accountsreceivable

D. equipment

E. patents

22. Whichoneofthefollowingstatementsconcerningliquidityiscorrect?

A. Ifyousoldanassettoday,itwasaliquidasset.

B. Ifyoucansellanassetnextyearatapriceequaltoitsactualvalue,theassetishighlyliquid.

C. Trademarksandpatentsarehighlyliquid.

D. Thelessliquidityafirmhas,thelowertheprobabilitythefirmwillencounterfinancialdifficulties.

E. Balancesheetaccountsarelistedinorderofdecreasingliquidity.

23. Liquidityis:

A. ameasureoftheuseofdebtinafirm'scapitalstructure.

B. equaltocurrentassetsminuscurrentliabilities.

C. equaltothemarketvalueofafirm'stotalassetsminusitscurrentliabilities.

D. valuabletoafirmeventhoughliquidassetstendtobelessprofitabletoown.

E. generallyassociatedwithintangibleassets.

24. Whichofthefollowingaccountsareincludedinshareholders'equity?

I.interestpaid

II.retainedearnings

III.capitalsurplus

IV.long-termdebt 

A. IandIIonly

B. IIandIVonly

C. IandIVonly

D. IIandIIIonly

E. IandIIIonly

25. Bookvalue:

A. isequivalenttomarketvalueforfirmswithfixedassets.

B. isbasedonhistoricalcost.

C. generallytendstoexceedmarketvaluewhenfixedassetsareincluded.

D. ismoreofafinancialthananaccountingvaluation.

E. isadjustedtomarketvaluewheneverthemarketvalueexceedsthestatedbookvalue.

26. Whenmakingfinancialdecisionsrelatedtoassets,youshould:

A. alwaysconsidermarketvalues.

B. placemoreemphasisonbookvaluesthanonmarketvalues.

C. relyprimarilyonthevalueofassetsasshownonthebalancesheet.

D. placeprimaryemphasisonhistoricalcosts.

E. onlyconsidermarketvaluesiftheyarelessthanbookvalues.

27. Asseenonanincomestatement:

A. interestisdeductedfromincomeandincreasesthetotaltaxesincurred.

B. thetaxrateisappliedtotheearningsbeforeinterestandtaxeswhenthefirmhasbothdepreciationandinterestexpenses.

C. depreciationisshownasanexpensebutdoesnotaffectthetaxespayable.

D. depreciationreducesboththepretaxincomeandthenetincome.

E. interestexpenseisaddedtoearningsbeforeinterestandtaxestogetpretaxincome.

28. Theearningspersharewill:

A. increaseasnetincomeincreases.

B. increaseasthenumberofsharesoutstandingincrease.

C. decreaseasthetotalrevenueofthefirmincreases.

D. increaseasthetaxrateincreases.

E. decreaseasthecostsdecrease.

29. Dividendspershare:

A. increaseasthenetincomeincreasesaslongasthenumberofsharesoutstandingremainsconstant.

B. decreaseasthenumberofsharesoutstandingdecrease,allelseconstant.

C. areinverselyrelatedtotheearningspershare.

D. arebaseduponthedividendrequirementsestablishedbyGenerallyAcceptedAccountingProcedures.

E. areequaltotheamountofnetincomedistributedtoshareholdersdividedbythenumberofsharesoutstanding.

30. Earningspershare 

A. willincreaseifnetincomeincreasesandnumberofsharesremainsconstant.

B. willincreaseifnetincomedecreasesandnumberofsharesremainsconstant.

C. isnumberofsharesdividedbynetincome.

D. istheamountofmoneythatgoesintoretainedearningsonapersharebasis.

E. Noneoftheabove.

31. AccordingtoGenerallyAcceptedAccountingPrinciples,costsare:

A. recordedasincurred.

B. recordedwhenpaid.

C. matchedwithrevenues.

D. matchedwithproductionlevels.

E. expensedasmanagementdesires.

32. Depreciation:

A. isanoncashexpensethatisrecordedontheincomestatement.

B. increasesthenetfixedassetsasshownonthebalancesheet.

C. reducesboththenetfixedassetsandthecostsofafirm.

D. isanon-cashexpensewhichincreasesthenetoperatingincome.

E. decreasesnetfixedassets,netincome,andoperatingcashflows.

33. Whenyouaremakingafinancialdecision,themostrelevanttaxrateisthe_____rate. 

A. average

B. fixed

C. marginal

D. total

E. variable

34. Anincreaseinwhichoneofthefollowingwillcausetheoperatingcashflowtoincrease?

A. depreciation

B. changesintheamountofnetfixedcapital

C. networkingcapital

D. taxes

E. costs

35. Afirmstartsitsyearwithapositivenetworkingcapital.Duringtheyear,thefirmacquiresmoreshort-termdebtthanitdoesshort-termassets.Thismeansthat:

A. theendingnetworkingcapitalwillbenegative.

B. bothaccountsreceivableandinventorydecreasedduringtheyear.

C. thebeginningcurrentass