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.