tb questions

Which one of the following is included in a firm's market value but yet is excluded from the firm's accounting value? A) Real estate investment B) Good reputation of the company C) Equipment owned by the firm D) Money due from a customer E) An item held by the firm for future sale

B) Good reputation of the company (aka goodwill)

Which one of the following is classified as a tangible fixed asset? A) Accounts receivable B) Production equipment C) Cash D) Patent E) Inventory

B) Production equipment

Which one of the following accounts is the most liquid? A) Inventory B) Building C) Accounts Receivable D) Equipment E) Land

C) Accounts Receivable

Which one of the following is a current asset? A) Accounts payable B) Trademark C) Accounts receivable D) Notes payable E) Equipment

C) Accounts receivable

Which one of the following represents the most liquid asset? A) $100 account receivable that is discounted and collected for $96 today B) $100 of inventory that is sold today on credit for $103 C) $100 of inventory that is discounted and sold for $97 cash today D) $100 of inventory that is sold today for $100 cash E) $100 of accounts receivable that will be collected in full next week

D) $100 of inventory that is sold today for $100 cash

Which one of the following statements concerning net working capital is correct? A) Net working capital increases when inventory is purchased with cash. B) Net working capital excludes inventory. C) Total assets must increase if net working capital increases. D) Net working capital may be a negative value. E) Net working capital is the amount of cash a firm currently has available for spending

D) Net working capital may be a negative value.

Which one of the following will decrease the value of a firm's net working capital? A) Using cash to pay a supplier B) Depreciating an asset C) Collecting an accounts receivable D) Purchasing inventory on credit E) Selling inventory at a loss

E) Selling inventory at a loss

Shareholders' equity: A) is referred to as a firm's financial leverage. B) is equal to total assets plus total liabilities. C) decreases whenever new shares of stock are issued. D) includes patents, preferred stock, and common stock. E) represents the residual value of a firm.

E) represents the residual value of a firm.