ACCT Quizzes
Why is the cost of the pizza party for our lemonade stand not considered an asset?
??
Stockholder's, the owners of a corporation, hold _____ claim on the firm.
?? ? answer choices a residual the sole
Which of the following is a 'stock'?
???
OWNER'S EQUITY =
Assets - Liabilities
Which of the following is a benefit of debt relative to equity?
Lower cost of capital
Balance Sheet
at a given point in time; indicates the financial position [end of a fiscal quarter or year] assets are presented in order of liquidity liabilities are presented in order of maturity
Which of the following documents is a primary source of accounting data (assets, liabilities, equity, revenues, expenses)?
bond indenture
A bill of lading is a document issued by a(n) __________.
carrier
a bill of lading is a document issued by a(n):
carrier
SOURCES OF FINANCING (in order of preferrence)
1. Through INTERNAL funds (earned capital) 2. Through CREDITORS (borrowing from debtholders) ~ "mezzanine financing" ~ 3. Through EQUITY investors (funds from shareholders) ^^ this order is called the "pecking order hypothesis"
2 Primary Categories of Equity
1. contributed capital 2. retained earnings
Nature of business
1. obtain CAPITAL 2. to make INVESTMENT 3. to generate a positive FUTURE RETURN
Which of the following is NOT a benefit of debt relative to equity?
Debt covenants increase opportunities
Which of the following indicates the capital structure of the firm?
Debt-to-equity ratio
Companies tend to issue new equity shares when their stock price is LOW.
FALSE
Companies tend to issue new equity shares when their stock price is low.
FALSE
Which of the following excel formulas determines how much you will have in 5 years if you invest $10,000 at 4% annual interest, compounded semiannually?
FV (2%, 10, 0, -10000)
Retained earnings represent an asset to the firm.
False
Which of the following accounts does not arise from the supplier-customer interaction?
Goodwill
In our in-class exercise during Meeting #2, which company had the largest ROI?
J's Lemonade Stand
Which of the following documents is not a primary source of accounting data (assets, liabilities, equity, revenues, expenses)?
Shareholder agreement
Which of the following is NOT a cash outflow a company promises to make when it issues a bond?
debt covenants
Which of the following indicates the capital structure of a firm?
debt-to-equity ratio
Which of the following documents is a primary source of accounting data (assets, liabilities, equity, revenues, expenses)?
employment contracts
______ is primarily designed for users external to the firm.
financial accounting
Mezzanine Financing
funds for plant expansion, marketing expenditures, working capital, and product or service improvements (debt-equity hybrid)
Which of the following is not a primary source of accounting data (assets, liabilities, equity, revenues, expenses)?
independent auditor's report AND shareholder agreement
Corporate Finance
informs CAPITAL acquisition
Managerial Accounting
informs INVESTMENT decisions
which of the following documents is a primary source of accounting data (assets, liabilities,equity, revenues, expenses)?
lease agreement
ASSETS =
liabilities + stockholders equity
which of the following IS a benefit of debt relative to equity?
lower cost of capital
2 types of accounting
managerial: primarily for decision makers WITHIN the company. (internal users only) (LOOKS FORWARD) financial: for decision makers OUTSIDE the company. (LOOKS BACKWARDS) (EXTERNAL users: quarterly reports & statements)
Financial Accounting
measure the RETURNS
Income Statement
measures the firm's performance over a period of time. [for the year ending in dec 31, 2017] compares REVENUES to EXPENSES
More than half of CEO compensation is now comprised of
stock options
More than half of CEO compensation is now comprised of _______.
stock options
Equity refers to:
the ownership stake. (residual claim) what the owner's have a claim to.
For what fundamental purpose do we keep records?
to help make business decisions