Financial headache
3The person charged with running the corporation by instituting the rules and policies set by the board of directors is called A) the Chief Operating Officer. B) the Chief Financial Officer. C) the Chief Executive Officer. D) the Company President.
C
A 30 year mortgage loan is a A) Current Asset. B) Current Liability. C) Long-term liability. D) Long-term asset.
C
Accounts payable is a A) Long-term asset. B) Current Asset. C) Current Liability. D) Long-term liability.
C
Which of the following adjustments to net income is not correct if you are trying to calculate cash flow from operating activities? A) Deduct increases in inventory B) Add back depreciation C) Add increases in accounts receivable D) Add increases in accounts payable
C
Which of the following balance sheet equations is incorrect? A) Assets = Liabilities + Shareholders' Equity B) Assets - Liabilities = Shareholders' Equity C) Assets - Current Liabilities = Long Term Liabilities D) Assets - Current Liabilities = Long Term Liabilities + Shareholders' Equity
C
The third party who checks annual financial statements to ensure that they are prepared according to GAAP and verifies that the information reported is reliable is the A) Securities and Exchange Commission (SEC). B) NYSE Enforcement Board. C) Accounting Standards Board. D) auditor.
D
Which of the following is NOT an advantage of a sole proprietorship? A) Ease of setup B) No separation of ownership and control C) Single taxation D) Limited liability
D
Which of the following statements regarding net income transferred to retained earnings is correct? A) Net income = net income transferred to retain earnings + dividends B) Net income = net income transferred to retained earnings - dividends C) Net income transferred to retain earnings = net income + dividends D) Net income transferred to retain earnings - net income = dividends
A
Which of the following statements is false? A) In bankruptcy, management is given the opportunity to reorganize the firm and renegotiate with debt holders. B) If the corporation fails to satisfy debt holders' claims, debt holders may lose control of the firm. C) As long as the corporation can satisfy the claims of the debt holders, ownership remains in the hands of the equity holders. D) Because a corporation is a separate legal entity, when it fails to repay its debts, the people who lent to the firm, the debt holders are entitled to seize the assets of the corporation in compensation for the default.
B
Which of the following statements regarding limited partnerships is true? A) There is no limit on a limited partner's liability. B) A limited partner's liability is limited by the amount of their investment. C) A general partner's liability is limited by the amount of their investment. D) A limited partner is not liable until all the assets of the general partners have been exhausted.
B
