Exam 1 V361

Your firm has total assets of $4,900, fixed assets of $3,200, long-term debt of $2,900, and short-term debt of $1,400. What is the amount of net working capital?

300

Dividends paid = Ending Retained Earnings - Beginning RE -

Net income

Earnings Per Share = (Sales * PM) /

shares outstanding

T or F, Costs of goods sold are recorded based on the matching principle.

true

Which one of the following is least likely to be an agency problem?

increasing the market value of the firm's shares

Price - sales Ratio = (PE ratio * EPS) / (sales/ _____)

shares

Which one of the following must be true if a firm had a negative cash flow from assets?

the firm utilized outside funding

A general partner:

is personally responsible for all the partnership debts.

What type of business organization has the rights of an individual?

corporation

Which form of business structure is most associated with agency problems?

corporations

Which one of the following is an unintended result of the Sarbanes-Oxley Act?

corporations delisting from major exchanges

Net working capital is calculated by subtracting current assets from

current liabilities

Net Capital Spending is calculated by Ending Net Fixed assets - beginning Net Fixed assets +

depreciation

Which one of the following terms is defined as a conflict of interest between the corporate shareholders and the corporate managers?

agency problem

Which one of the following is the financial statement that shows the accounting value of a firm's equity as of a particular date?

balance sheet

Net new equity is calculated by subtracting ending common stock & paid in surplus from

beginning common stock & paid in surplus

Which one of the following terms is defined as the management of a firm's long-term investments?

capital budgeting

Interest paid - Net new borrowing (ending long-term debt - beginning long-term debt) =

cash flow to creditors

GAAP stands for?

generally accepted accounting principles

Net cash from operating activities = Net income + depreciation + AP - AR +

inventory

A business partner whose potential financial loss in the partnership will not exceed his or her investment in that partnership is called a

limited partner

What has a greater ability to raise capital than a sole proprietorship.

limited partnership

Which one of the following grants an individual the right to vote on behalf of a shareholder?

proxy

A business owned by a solitary individual who has unlimited liability for its debt is called a

sole proprietorship