Finance Quiz

Market values: A. reflect expected selling prices given the current economic situation. B. are affected by the accounting methods selected. C. are equal to the initial cost minus the depreciation to date. D. either remain constant or increase over time.

A. Reflect the expected selling prices given the current economic situation

Shareholders' equity is best defined as: A. the residual value of a firm. B. positive net working capital. C. the net liquidity of a firm. D. cash inflows minus cash outflows.

A. The residual value of a firm

Highly liquid assets: A. increase the probability a firm will face financial distress. B. appear on the right side of a balance sheet. C. generally produce a high rate of return. D. can be sold quickly at close to full value.

C. Generally produce a high rate of return

The financial statement that summarizes a firm's accounting value as of a particular date is called the: A. income statement. B. cash flow statement. C. liquidity position. D. balance sheet.

D. Balance Sheet

Cash flow to stockholders is defined as: A. cash flow from assets plus cash flow to creditors. B. operating cash flow minus cash flow to creditors. C. dividends paid plus the change in retained earnings. D. dividends paid minus net new equity raised.

D. Dividends paid minus net new equity