Paregrime Test

Which financial statement will allow you to determine the gross margin for retailer or manufacturer?

Income Statement

On. the basis of the info provided in the table above for a corporation, the corporation's net cash flow from operating activities for the current year is:

$108,000

The company's working capital is

$236,000

Henry develops gaming apps from home instead of working as an engineer and earning $50,000 a year. He has invested $20,000 to upgrade to the hardware that he needs and estimates his expenses at $17,000 a year. Downloads generated $130,000 in revenue. during the first year. What are his explicit costs?

$37,000

A firm issued 10,000 shares of $2 par-value common stock, receiving proceeds of $40 per share. The accounting entry for the paid-in capital in exess of par account is

$380,000

On May 31, Company O's...... What is the correct cash balance on May 31?

$5,080

The annual rate of return is variously referred to as the

- cost of capital - discount rate - opportunity cost

For its most recent year a company had sales of $830,000.....

10.0

Refer to table 6.4, which shows a utility schedule for a consumer's consumption of. chocolate bars. The marginal utility of the second chocolate bar is ________ units.

15

Refer to the market supply schedule for pizza in Table 4.2. When the price increases from $6 to $15, what is the change in quantity supplied in the pizza market?

28 million pizzas

Refer to Table 6.3, which shows the total utility and marginal utility derived from the consumption of scones. The first column of the table represents the number of scones a consumer consumes in a day. The second column of the table presents the total utility derived from that consumption, and the third column shows the marginal utility of each additional scone. The total utility derived from the consumption of one scone is _____ units.

30

Refer to Table 6.1, which shows the marginal utility of each additional unit of pretzel for a consumer. The first column of the table shows the number of pretzels consumed in a day, and the second column of the table shows the marginal utility of each additional unit of pretzel. The marginal utility of the third pretzel is _____ units.

5

Which would be the most favorable basis for allocating manufacturing overhead for a factory with automated equipment and a significant variation of services by its indirect labor?

Activity based costing

The financial statement that reports the assets, liabilities, and stockholders' equity at a specific date is the:

Balance sheet

Refer to table 4.6. In which of the following combination does the equilibrium quantity increase?

Box A

The book value of an asset is defined as:

Cost minus accumulated depriciation

A corporation's working capital is calculated using which amounts?

Current assests and current liabilities

A company borrowed $100,000 on December 1 by signing a six-month note.....

December 31

A company disposes of equipment that it no longer uses in its business. The amount received by the company's more than the amount the asset is carried at in the accounting records. The company will report a(n):

Gain

A company borrowed $100,000 on December 1 by signing a six-month note that specifies interest at an annual percentage rate of 12%. No interest or principal payment is due until the note matures on May 31. The company prepares financial statements at the end of each calendar month. The following questions pertain to the adjusting entry that should be entered in the company's records.

Interest Payable

On December 1 a company borrowed $100,000 at 12% per year......

Interest expense of $1,000

In a period or rising prices, which inventory valuation method would generally yeild both the lowest ending inventory value and the lowest net income figure?

Last in, first out (LIFO)

ABC Co. incurs cleanup expense of $500 on December 30. The supplier's invoice states that the $500 is due by January 10 and ABC will pay the invoice on January 9. ABC follows the accrual basis of accounting and its accounting year ends on December 31. What is the effect of the cleanup service on the December balance sheet of ABC?

Liabilities incresaed

Which of the following is true of misrepresentation?

a misrepresentation is not actionable unless the innocent party relied on the misrepresentation and acted on it

A corporation's net income will cuase a change in which component of stockholders' equity?

Retained earnings

Which of the following is NOT a financial institution?

a newspaper publisher

Client Jay pays ABC Co. $1,000 in December for ABC to perform services for Jay in 45 days. ABC uses the accrual basis of accounting. In December ABC will debit Cash for $1,000. What will be the other account involved in the December accounting entry prepared by ABC (and what type of account is it)?

Unearned Revenues

Which of the following is true of express warranties?

a retailer is liable for the express warranties made by manufacturers of goods it sells

Which type of journal entries are made at the end of each accounting period so that the financial statements better reflect the accrual method of accounting?

adjusting

Andrew is employed as a Chief Financial Officer of EasyMoney firm in New York City, for a salary of $200,000 per year on a three-year contract. His employer terminates Andrew with two years left on his contract. Andrew accepts employment as a financial analyst at a different firm that pays $150,000 per year. Which of the following hold true in this scenario?

andrew can sue his prior employer and recover $100,000

A(n) _________ is used if the obligor does not want to deal with or render performance to an unknown third party.

anti-assignment clause

Which of the following articles in the UCC deals with the sale of goods?

article 2

The Golden Arches of McDonald's are recognized worldwide. This symbol is an example of a

brand mark

How does a perfectly competitive firm maximize profit?

by controlling its output

A two-party negotiable instrument that is a special form of note created when a person deposits money at a financial institution in exchange for the institution's promise to pay back the amount of the deposit plus an agreed-on rate of interest upon the expiration of a set time period agreed upon by the parties is known as a ____________.

certificate of deposit

Refer to Exhibit. 6.6. Which shows the market demand schedule for a good. When the price of the good is zero, the shaded and unshaded areas under the demand curve D represent _________.

consumer surplus

A ___________ is something an organization does very well that may give it an advantage over its competition.

cor competency

The __________ is the rate of return a firm must earn on its investments in projects in order to maintain the market value of its stock.

cost of capital

Refer to exhibit 8.4, which shows the demand and the cost curves of a perfectly competitive firm. At a market price of P1, the profit-maximizing quantity for the firm is ________.

d units of output

The two types of purchases are. consumer and business. The primary distinguishing factor between the two is

the purchaser's intended use of the product

Long-term debt = 45%, 5% Preferred stock= 10, 14 Common stock equity= 45, 22 If the firm were to shift toward a more leveraged capital structure, the weighted average cost of capital would

decrease

The variables that can be used to segment markets are

demographic, psychographic, and behavioristic

The three basic segmentation strategies available to marketers are undifferentiated, concentrated, and ___________.

differentiated

A competitive market that allocates funds to their most productive use is called a(n)

efficient market

A fancy word for "observation" is __________.

ethnography

Worker's compensation is a(n) _________. remedy as between the employee and the employer.

exclusive

The work-related test puts liability on the employee if the intentional tort is committed within work-related time and space.

false

The Sarbanes-Oxley Act of 2002 was passed in response to

false disclosures in financial reporting

Which of the following is a function of the state supreme courts?

hearing appeals from intermediate appellate state courts and certain trial courts

A nominal rate of interest is composed of

the risk-free rate plus a risk premium

Mary buys a lottery ticket and promises to buy her friend Sharon a new pair of shoes if she checks the lottery results while Mary is away. Sharon agrees to do so, provided she has the time for it. What kind of contract do Mary and Sharon have?

illusory promise

A term in a contract that can reasonably be supplied by the court is referred to as a(n) __________.

implied term

Suppose the market for kids' shoes is initially in equilibrium. For a given upward-sloping supply curve, other things being equal, an increase in the price of Velcro which is used as fasteners for kids' shoes will result in a(n) __________

increase in the equilibrium price but a decrease in the equilibrium quantity of shoes

A perfectly competitive firm is currently producing at a point where price wher price is $10 and both marginal cost and average variable cost are $7. To maximize profit or minimize loss in the short run, this firm should ________.

increase its output

Which of the following is true of a general power of attorney?

it may allow the agent to sign legal documents on the principal's behalf

Which of the following is true in the short run at the output level where average. total cost is at its minimum?

marginal cost equals average total cost

A firm enters into a consent decree to avoid a major legal setback. If the terms of the consent decree effectively double the firm's fixed costs, the _______.

marginal cost remains unchanged

According to the coming and going rule, what is the liability of the principal for injuries caused by its agents and employees while they are on their way to or from work?

no liability

The rate of interest agreed upon contractually charged by a lender or promised by a borrower is the __________ interest rate.

nominal

The Hound Dog Bus Company contemplates expanding its New Mexico operations by offering services from Raton to Santa Fe. It has estimated that the total cost of the trip will be $400, of which $150 is fixed cost, which it has already paid. The company expects an increase in revenue by $275. from the trip. The Hound Dog Bus Company should _______________.

offer this service because the additional revenue exceeds the additional cost of this service

The cost of captial reflects the cost of funds

over a long-run time period

Holders of equity capital

own the firm

According to the efficient market theory,

prices of actively traded stocks do not differ from their true values in an efficient market

The 5 steps of the Consumer Decision-Making process, in order are:

problem recognition, information search, evaluation of alternatives, purchase, post-purchase evaluation

The stages of the business buying decision process, in order, are

recognizing the problem, establishing product specifications, searching for products and evaluating possible suppliers, selecting suppliers and products, and evaluating performance

Studies show that the demand curve for peas has shifter our time. Which of the following explanations would you reject first?

the price of peas has changed

Refer to exhibit 6.3, which shows Ken's demand curve for neckties. When the price of neckties is $5, Ken purchases four neckties. When the price of neckties falls to $4, he purchases five neckties. A decline in the price of neckties cuases his expenditure to __________.

remain constant at $20, increasing his consumer surplus

___________ is an action to undo a contract.

rescission

The ___________ is the right of a seller or lessor to demand the return of goods from the buyer or lessee under specified situations.

right to reclaim goods

One key advantage of using secondary data instead of primary data is

secondary data is usually less expensive

The ___________ bears the risk of loss during transportation in a destination contract.

seller

The key participants in financial transactions are individuals, businesses, and governments. Individuals are net _________ of funds, and businesses are net ________ of funds.

suppliers; demanders

As the price of milk increases, producers are generally willing to sell a larger quantity of milk in the market, other things constant. This represents the law of:

supply

The conflict between the goals of a firm's owner and the goals of its non-owner managers is

the agency problem

Trading is carried out on the floor of the New York Stock Exchange by

the auction process

In the Exhibit given below, which of the following is true at the price ceiling, P?

the excess quantity demanded equals 300 gallons

Which of the following correctly describes the relationship between the marginal cost and average variable cost curves?

the marginal cost curve crosses the average variable cost curve at the average variable cost curves' minimum point

A offer is terminated on the grounds of "lapse of time" if ___________.

the offer is not accepted within a stated time period

The officer responsible for the firm's financial activities such as financial planning and fund raising, making capital expenditure decisions, and managing cash, credit, the pension fund, and foreign exchange is

treasurer

Specific performance is awarded if the subject matter of the contract is unique.

true

Forbearance of a legal right can be provided as consideration.

ture

When Henry Ford introduced the Model T, he offered only one model in one color as a way of provide "transportation for the masses." Alfred P. Sloan, President of General Motors, offered the Chevrolet as an affordable starter car, the Buick as a car for those who could afford more features and amenities, and Cadillac as the ultimate luxury car for those who wanted to show the world they had "arrived". Henry Fords's market segmentation strategy used the _________ approach, while Alfred P. Sloan's strategy used the __________ approach.

undifferentiated; differentiated

Credit that does not require any collateral to protect the payment of the debt is referred to as ___________.

unsecured credit

If you ordered the all-you-can-eat special, you continue to eat as long as _____.

your expected marginal utility from another bite is positive