ACCT 3309 Quizzes (Exam 1)

Net income

Earnings management occurs when managers opportunistically use discretion to change _______________ ("earnings") to mask the company's underlying economic performance

Stock Options

More than half of CEO compensation is now comprised of ____________

"=FV(2%,10,0,-10000)"

Which of the following Excel formulas determines how much you will have in 5 years if you invest $10,000 at 4% annual interest, compounded semiannually? A.) "=FV(2%,10,0,-10000)" B.) "=PV(4%,5,0,-10000)" C.) "=FV(4%,10,0,-10000)" D.) "=PMT(2%,10,0,-10000)"

Goodwill

Which of the following accounts does not arise from the supplier-customer interaction?

Fair Value (FV)

Which of the following calculations is NOT an excel formula used in time value of money calculations? A.) Payment (PMT) B.) Fair Value (FV) C.) Present Value (PV) D.) Future Value (FV) E.) Number of Periods (NPER)

Employment Contracts

Which of the following documents is a primary source of accounting data (assets, liabilities, equity, revenues, expenses)?

Lease Agreement

Which of the following documents is a primary source of accounting data (assets, liabilities, equity, revenues, expenses)?

Debt-to-equity ration

Which of the following indicates the capital structure of a firm? A.) Debt-to-equity ration B.) Cost of debt C.) Earnings per share

Debt Covenants

Which of the following is NOT a cash outflow a company promises to make when it issues a bond? A.) Interest Annuity B.) Debt Covenants C.) Principal Amount

Shareholder Agreement

Which of the following is NOT a primary source of accounting data (assets, liabilities, equity, revenues, expenses)?

The KwH of energy in my car battery right now

Which of the following is a 'stock'? A.) The amount I paid on my car loan last year B.) All KwH of energy I've added to my car battery from charging C.) The KwH of energy in my car battery right now

Lower cost of capital

Which of the following is a benefit of debt relative to equity? A.) Lower cost of capital B.) Debt covenants limit opportunities C.) Debt increases default risk

Not primary sources of accounting data (assets, liabilities, equity, revenues, expenses)

- Pitch deck - Website terms of use - Operating agreement - Shareholder agreement - Dividend schedule - Business plan

fraud

Earnings management becomes __________ when companies intentionally provide materially misstated information

carrier

A bill of lading is a document issued by a(n) ________

investments

Capital budgeting process to analyze _____________.

value

Capital structure decisions (D/E) affect firm value

False

Companies tend to issue new equity shares when their stock price is low. T/F

hurdle rate

Cost of capital as "__________"; minimal success

To help make business decisions

For what fundamental purpose do we keep records?

Companies with steady cash flows can more safely take on leverage, as their default risk is lower

Given the costs & benefits of debt versus equity that we discussed, what type of company would be best off with a highly levered capital structure (i.e., mostly debt?) What type pf company would avoid leverage & finance itself with mostly equity?

False

Retained earnings represent an asset to the firm. T/F

a residual

Stockholders, the owners of a corporation, hold _____________ claim on the firm.

Because the expected future benefits are nebulous & can't be reliably measured

Why is the cost of the pizza party for our lemonade stand not considered an asset?

Financial Accounting

_____________ is primarily designed for users external to the firm.