CH 2 LS

On the balance sheet, assets are listed at their Blank______ value. Multiple choice question. market estimated economic book

Book

Noncash items do not affect Blank______. Multiple choice question. net income cash flow retained earnings earnings per share

Cash Flow

The short run is a period when there are Blank______ costs. Multiple choice question.

both fixed and variable

The actual economic value of an asset varies Blank______ the asset's future cash flows. Multiple choice question. directly with independent of indirectly with

directly with

Which of these are generally considered to be short-run fixed costs?

overhead expenses management salaries property taxes

What are two classifications of costs used by financial accountants?

product costs period costs

Which of the following are examples of short-run fixed costs? Multiple select question. material costs rent bond interest sales commissions

rent bond interest

Who owns treasury stock? Multiple choice question. U.S. Treasury individual shareholders the issuer of the stock U.S. MInt

the issuer of the stock

Which of these will result from a firm using cash to buy inventory? Multiple select question. Net working capital would increase. Cash would decrease. Net working capital would decrease. Inventory would increase.

Cash would decrease. Inventory would increase.

True or false: In the short run, all costs are fixed. True false question.

False

selling a firm's plant and equipment results in a change in Blank______. Multiple choice question. fixed assets current liabilities goodwill intangible assets

Fixed Assets

Operating cash flow differs from total cash flow in that the latter makes adjustments for Blank______. Multiple select question. retained earnings net income additions to net working capital capital spending

additions to net working capital capital spending

When a customer purchases an item on credit, the purchase amount is recorded in the books of the seller in which one of these accounts? Multiple choice question. accrued expense cash accounts payable accounts receivable

accounts receivable

Which of the following are examples of financing activities? Multiple select question. federal tax payments interest expense payments net payments to creditors net payments to owners

net payments to creditors net payments to owners

The total cash flow of the firm includes Blank______. Multiple choice question. only operating and capital cash flows only capital and net working capital cash flows operating, capital spending, and net working capital cash flows only operating and net working capital cash flows

operating, capital spending, and net working capital cash flows

Select all that apply The short run for a firm is the period of time during which Blank______. Multiple select question. some costs are fixed all costs are variable output is fixed output can vary

some costs are fixed output can vary

True or false: A balance sheet shows what a firm owns and how it is financed. True false question.TrueFalse

True

True or false: There is a correlation between future cash flows and the economic value of an asset. True false question.TrueFalse

True

Which of these questions can be answered by reviewing a firm's balance sheet? How much net income has the firm earned this period? What is the total amount of assets the firm owns? How much of the firm's net income was paid out in dividends? How much debt is used to finance the firm?

What is the total amount of assets the firm owns? How much debt is used to finance the firm?

What are the primary concerns for a supplier? Multiple select question. retained earnings accounts payable promptness of payments competition in the industry

accounts payable promptness of payments

A decrease in depreciation expense Blank______ earnings per share. Multiple choice question.

increases

When a firm pays out fewer dividends, it Blank______ the accounting value of its retained earnings. Multiple choice question. lowers has no effect on increases

increases

The goal of management is to increase Blank______. Multiple choice question. market value of bonds book value of bonds market value of stock book value of stock

market value of stock

The accounting equation shows that stockholders' equity equals assets Blank______ liabilities. Multiple choice question. times divided by minus plus

minus

Debt service means repaying Blank______. Multiple select question. both creditors and shareholders principal shareholders interest

principal interest