Finance Chapter 2 LearnSmart Questions

Rank the ease (from easiest to hardest) of turning the following assets into cash

1. Cash Equivalents 2. Accounts Receivable 3. Inventory 4. Plant and Equipment

EPS is

Earnings Per Share

GAAP

Generally Accepted Accounting Principles

Which of these items is NOT shown on the balance sheet?

Good management Favorable Economic Conditions Proprioty _____

Stockholder's equity ____ when retained earnings increase.

Increases

Whose responsibility is it to create value for the firm?

Management

The price at which willing buyers and sellers would trade is called ____ value

Market

Liabilities usually involve which of these?

Obligations to the firm Require a cash payout within a stated period of time.

An official accounting statement that helps to explain the change in cash and cash equivalents is called a ______

Statement of cash flows

What is treasury stock?

Stock that the firm has repurchased

True or False : Contract Liabilities put the firm at risk for default?

True

EBIT stands for earnings ____ and taxes

before interest

On the balance sheet assets are listed at their _____ value

book

Accounting _____ refers to the speed and ____ with which assets can be converted to ____.

liquidity ease cash

Which of the following are included in a firm's inventory?

Raw materials, finished goods, work-in-process

The short run for a firm is the period of time during which ____

some costs are fixed output can vary

One of the most important limitations of a ____ _____ is that is does not show ____ values.

Balance Sheet Market

Operating Cash Flow includes which of these?

Tax Payments

A balance sheet reflects a firm's _____ value on a particular date.

accounting

What does stockholders Equity represent?

A residual claim against the firms assets