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Describe the financial statements that corporations publish and the information that each statement provides. A company has total assets worth $900 million and total liabilities worth $400 million at the end of December 31. What is the amount of money received by the stockholders, if they liquidate all of its assets for $800 and pays off all of its outstanding debt at book value? A) $475 million B) $400 million C) $850 million D) $425 million E) $1,325 million F) None of the other answers

B

Describe the financial statements that corporations publish and the information that each statement provides. A source of cash when preparing a statement of cash flow would be which of the following? (Think increase or decrease in assets or liability/equity accounts) A) An increase in property, plant, and equipment B) An decrease property, plant, and equipment C) An increase in accounts receivable D) A decrease in accounts payable E) A decrease in accrued wages F) None of the other answers

B

Describe the financial statements that corporations publish and the information that each statement provides. Which of the following financial statements is prepared to show the changes in the common equity accounts between balance sheet dates? A) Pro forma statement B) Statement of retained earnings C) None of the answers D) Proxy statement E) Income statement F) Statement of cash flows

B

Describe the financial statements that corporations publish and the information that each statement provides. Which of the following mathematical expressions computes the net worth of a firm? A) Net worth = Current assets minus current liabilities B) Net worth = Total assets minus total liabilities C) Net worth = Total liabilities minus current liabilities D) None of the answers Net worth = Total liabilities minus current assets E) Net worth = Total assets minus current liabilities

B

Describe the financial statements that corporations publish and the information that each statement provides. Retained earnings is the total amount of: A) income that is distributed as dividends to the shareholders. B) debt not repaid in the current year. C) None of the other answers D) accumulated depreciation charged on the firm's assets. E) net sales since the firm started business that have been reinvested in assets. F) profit retained by a firm to pay taxes.

C

Describe the financial statements that corporations publish and the information that each statement provides. Which of the following is considered by analysts when comparing the operations of two firms that are financed differently? A) Earnings per share B) Total assets C) None of the other answers D) Retained earnings E) Net sales F) Gross profit

C

Describe the financial statements that corporations publish and the information that each statement provides. Which of the following is true about the book value and market value of a firm's debt? A) The book value of a firm's debt generally is rarely equal to or very close to the market value of the firm's debt. B) The market value of a firm's debt must equal the market value of a firm's assets. C) None of the other choices D) The market value of a firm's debt generally is higher than the book value of firm's assets. E) The book value of a firm's debt generally is either equal to or very close to the market value of firm's assets. F) The book value of a firm's debt generally is higher than the market value of the firm's debt.

C

Describe the financial statements that corporations publish and the information that each statement provides. Which of the following statements is true about net worth? A) A firm's net worth is the amount that the firm's assets can generate on their liquidation. B) A firm's net worth should be higher than the stockholders' equity. C) None of the answers D) A firm's net worth is the amount to be paid by the shareholders to the firm on liquidation of the firm. E) A firm's net worth should be equal to 50 percent of the value of the total assets of the firm. F) A firm's net worth is equal to total assets minus total liabilities minus stockholders equity.

C

Describe the financial statements that corporations publish and the information that each statement provides. A firm's net income as reported on its income statement is also known as the firm's _____. A) operating cash flow B) net sales C) noncash income D) accounting profit E) net cash flow

D

Describe the financial statements that corporations publish and the information that each statement provides. _____ is an example of a long-term investment of a firm. A) Accounts receivable B) Common stock C) None of the other answers D) Retained earnings E) Property F) Long-term bonds

E

Describe the financial statements that corporations publish and the information that each statement provides. Which of the following financial statements includes information about a firm's assets, equity, and liabilities at a specific point in time? A) Notes to the financial statements B) Cash flow statement C) Statement of changes in long-term financing D) Income statement E) Statement of retained earnings F) None of the other answers

F

Describe the financial statements that corporations publish and the information that each statement provides. Noncash assets are expected to produce cash over time. The amount of cash they eventually produce should be lower lower than the values at which the assets are carried on the books. T/F

False

Describe the financial statements that corporations publish and the information that each statement provides. The statement of cash flows is a financial statement that measures the flow of funds into and out of various accounts over time, whereas the balance sheet measures the financial position of the firm at a specific point in time. T/F

True