Series 65 - Unit 7 Quiz #1
Looking at the balance sheet, a corporation builds its capital structure with all of the following except A) retained earnings. B) cash. C) capital stock. D) long-term debt.
B.
KPT, Inc., is preparing to report its net income for the past year. An increase in which of the following causes a decrease in the reported net income? Tax rate Cash dividend Interest charged on bank loans A) II only B) I only C) I and III D) I and II
C.
The total of the cash from operations, investing, and financing, as reported on the statement of cash flows, is A) reported as a separate line item on the balance sheet. B) an integral part of the footnotes to the balance sheet required by generally accepted accounting principles. C) the net change in the cash position of the firm for the reporting period. D) reported as cash income on the income statement.
C.
Which of the following would appear as assets on a corporation's balance sheet? Prepaid expenses Deferred tax credits Notes payable Notes receivable A) I, II, and IV B) II and III C) I and IV D) I and III
C.
An analyst is viewing financial statements of Diderot Clothing Stores (DCS), a chain of high-fashion women's apparel. DCS had $7 million as its beginning-of-year retained earnings and it made post-tax profits of $3 million. The board of directors decides to pay a dividend of $1 million. Once paid, what will be the ending retained earnings? A) $9 million B) $7 million C) $10 million D) $3 million
A.
Federal securities laws require publicly traded companies to disclose certain information on a regular basis. Which of these forms must be submitted quarterly? A) Form 10-Q B) Form 10-K C) Form 8-K D) Form PF
A.
Net income A) represents the amount of money remaining after all expenses, including taxes. B) reflects the operating profits of a firm only. C) is paid out in cash to stockholders in addition to any declared dividends. D) must be paid out in dividends.
A.
A fundamental analyst would be interested in funds available for use in the business. Doing which of the following would have the greatest impact on future cash flow? A) Amortizing goodwill B) Retiring outstanding bonds C) Depreciation on assets used in the business D) Retaining earnings
B.
Due to changes in customer preferences, a manufacturing company has decided to discontinue the operations of one of its subsidiaries. An explanation of this decision would most likely be found in the company's A) tax return. B) footnotes to the financial statements. C) balance sheet. D) income statement.
B.
Many businesses choose to use a date other than December 31 to close out their financial year for accounting purposes. When this is done, it is said that the entity is reporting on A) an alternative-year basis. B) a fiscal-year basis. C) a calendar-year basis. D) a nontraditional basis.
B.
The SEC requires that reporting companies (those registered with the SEC) file certain information within specified time limits. Which of the following reports carries the shortest time limit? A) Form 10-K B) Form 8-K C) Form 10-Q D) Annual report
B.
What is the balance sheet equation? A) Assets = liabilities − shareholders' equity B) Assets = liabilities + shareholders' equity C) Assets = shareholders' equity − liabilities D) Assets = net worth
B.
Which of the following would have the effect of increasing a company's cash flow? A) Reducing sales B) Extending credit to good customers C) Issuance of a bond D) Increasing inventory
C.
An IAR is doing some research on a company. When viewing the corporation's financial statements, prepaid expenses would most likely be found as A) an expense on the income statement. B) a fixed asset on the balance sheet. C) a current liability on the balance sheet. D) a current asset on the balance sheet.
D.
