Chapter 2 Financial statements, taxes, cash flows

Teh cash flow related to interest payments less any net new borrowing is called the: Question 10Select one:a. operating cash flow b. capital spending cash flow c. cash flow to creditors d. net working capital e. cash flow from assets

cash flow to creditors

Net working capital is defined as: Question 9Select one:a. total assets minus total liabilities b. total liabilities minus shareholder's equity c. current liabilities minus shareholder's equity d. fixed assets minus long-term liabilities e. current assets minus current liabilities

current assets minus current liabilities

A firm has net working capital of 6903. Long-term debt is 2532, total assets are 523, and fixed assets are 8395. What is the amount of the total liabilities?

-12,243

Jensen Enterprises paid 320 in dividends and {int} in interest this past year. Common stock increased by {cs} and retained earnings decreased by -345. What is the net income for the year?

-25

Four years ago, Velvet Purses purchased a mailing machine at a cost of $142976. This equipment is currently valued at $85913 on today's balance sheet but could actually be sold for $7527. This is the only fixed asset the firm owns. Net working capital is $76542. and long term debt is $36877. What is the book value of current assets? Question 4Answera.4,800 b.7,700 c.125578.00 d.222,600 e.233,000

125578

Four years ago, Velvet Purses purchased a mailing machine at a cost of $142976. This equipment is currently valued at $85913 on today's balance sheet but could actually be sold for $7527. This is the only fixed asset the firm owns. Net working capital is $76542. and long term debt is $36877. What is the book value of shareholder's equity?

125578

A firm has common stock of {cs}, paid-in surplus of {pds}, total liabilities of 7005. current assets of 8849, and fixed assets of 35374. What is the amount of the shareholder's equity?

37218

A firm has 1139 in inventory, 622 in fixed assets, 1778 in accounts receivables, 1850 in accounts payable, and 1159 in cash. What is the amount of the current assets? Question 3Answera.$2,430 b.$990 c.$2,640 d.$710 e.4076

4076

A firm has 936 in inventory, 348 in fixed assets, 6524 in accounts receivable, 687 in accounts payable, and 36 in cash. What is the amount of the current assets?

7496

Which one of the following statements concerning net working capital is correct? Question 5Select one:a. Net working capital must be a positive value b. Net working capital increases when inventory is purchased with cash c. A decrease in the cash balance may or may not decrease net working capital d. Total assets must increase if net working capital increases e. Net working capital is the amount of cash a firm currently has available for spending

a decrease in the cash balance may or may not decrease net working capital

Which one of the following accounts is the most liquid? Question 10Select one:a. inventory b. accounts receivable c. equipment d. building e. land

accounts receivable

The _______ tax rate is equal to total taxes divided by total taxable income. Question 2Select one:a. total b. residual c. deductible d. marginal e. average

average

Which one of the following is the financial statement that shows the accounting value of a firm's equity as of a particular date? Question 7Select one:a. income statement b. statement of cash flows c. creditor's statement d. balance sheet e. dividend statement

balance sheet

The book value of a firm is: Question 2Select one: a. based on historical cost b. generally greater than the market value when fixed assets are included c. adjusted to the market value whenever the market value exceeds the stated book value d. equivalent to the firm's market value provided that the firm has some fixed assets e. more of a financial than an accounting valuation

based on historical cost

The cash flow of a firm which is available for distribution to the firm's creditors and stockholders is called the: Question 3Select one:a. net working capital b. cash flow to stockholders c. net capital spending d. operating cash flow e. cash flow from assets

cash flow from assets

Cash flow to stockholders is defined as: Question 6Select one :a. dividend payments less net new equity raised b. operating cash flow minus the cash flow to creditors c. the change in total equity over the past year d. cah lfow from assets plus the cash flow to creditors e. the total amount of interest and dividends paid during the past year

dividend payments less net new equity raised

Cash flow from assets is also known as the firm's: Question 3Select one:a. hidden cash flow b. free cash flow c. historical cash flow d. equity structure e. capital structure

free cash flow

The common set of standards and procedures by which audited financial statements are prepared is known as the : Question 5Select one:a. Standard Accounting Value Guidelines b. cash flow identity c. Financial Accounting Reporting Principles d. Generally Accepted Accounting Principles e. matching principle

generally accepted accounting principles

Which one of the following is included in a firm's market value but yet is excluded from the firm's accounting value? Question 8Select one: a. equipment owned by the firm b. real estate investment c. an item held by the firm for future sale d. good reputation of the company e. money due from a customer

good reputation of the company

The higher the degree of financial leverage employed by a firm, the: Question 9Select one:a. lower the balance in accounts payable b. lower the amount of debt incurred c. higher the number of outstanding shares of stock d. higher the probability that the firm will encounter financial distress e. less debt a firm has per dollar of total assets

higher the probability that the firm will encounter financial distress

Which one of the following is the financial statement that summarizes a firm's revenue and expenses over a period of time? Question 7Select one:a. statement of cash flows b. balance sheet c. income statement d. market value report e. tax reconciliation statement

income statement

The percentage of the next dollar you earn that must be paid in taxes is referred to as the _____ tax rate. Question 4Select one:a. total b. average c. mean d. marginal e. residual

marginal

Which one of the following statements concerning net working capital is correct? Question 10Select one:a. An increase in net working capital must also increase current assets b. Net working capital is a part of the opreating cash flow c. The lower the value of net working capital the greater the ability of firm to meet its current obligations d. Net working capital increases when inventory is sold for cash at a profit e. Firms with equal amounts of net working capital are also equally liquid

net working capital increases when inventory is sold for cash at a profit

Which one of these is most apt to be a fixed cost? Question 9Select one:a. shipping and freight b. manufacturing wages c. management bonuses d. raw materials e. office salaries

office salaries

Which term relates to the cash flow which results from a firm's ongoing, normal business activities? Question 5Select one:a. operating cash flow b. capital spending c. net working capital d. cash flow from assets e. cash flow to creditors

operating cash flow

Depreciation: Question 8Select one:a. decreases net fixed assets, net income, and operating cash flows b. is a noncash expense which increases the net income c. reduces both the net fixed assets and the costs of a firm d. reduces both taxes and net income e. increases the net fixed assets as shown on the balance sheet

reduces both taxes and net income

Shareholder's equity: Question 1Select one:a. increases in value anytime total assets increases b. includes long-term debt, preferred stock, and common stock c. represents the residual value of a firm d. is equal to total assets plus total liabilities e. decreases whenever new shares of stock are issue

represents the residual value of a firm

Which one of the following will increase the value of a firm's net working capital? Question 6Select one:a. using cash to pay a supplier b. depreciating an asset c. purchasing inventory on credit d. collecting an accounts receivable e. selling inventory at a profit Clear my choice CheckQuestion 6

selling inventory at a profit

Which one of the following must be true if a firm had a negative cash flow from assets? Question 7Select one:a. Newly issued shares of stock were sold b. The firm acquired new fixed assets c. The firm had a net loss for the period d. The firm borrowed money e. The firm utilized outside funding

the firm utilized outside funding

Which one of the following is classified as an intangible fixed asset? Question 2Select one:a. production equipment b. accounts receivable c. inventory d. building e. trademark

trademark