CMA Chapter 1 - Quiz Practicing 1

1. …………………………… an asset that could be either current or non-current

• Property, Plant and Equipment

• Cash

• Restricted Cash

• Short Term Bank Loan

Current liabilities do not include debts to be paid by funds in accounts classified as non-current. The statement is true or false?

• True

• False

Long term debt should be included in the current section of the statement of the financial position if;

• It is to be converted in to common stock before maturity

• It matures within the year and will be retired through the use of current assets

• Management plans to refinance it within the year

• A bond retirement fund has been set up for use in its scheduled retirement during the next year

Treasury stock is a contra-equity account that reduces equity on the balance sheet. The statement is true or false?

• True

• False

……………………….. refers to the company’s ability to pay its obligations when due.

• Risk

• Financial Flexibility

• Solvency

• Liquidity

A statement of financial position provides a basis for all of the following except;

• Computing rates of return

• Evaluating capital structure

• Assessing liquidity and financial flexibility

• Determining profitability and assessing past performance for a specific period

The line “income from continuing operations” appears on an income statement only if the form is not reporting results of discontinued operations. The statement is true or false?

• True

• False

The financial statement that provides a summary of the firms operations for a period of time is the…………..

• Income statement

• Statement of financial position

• Statement of shareholders equity

• Statement of retained earnings

Payment for the settlement of the principal amount of the zero-coupon debt instruments is an event comes under…………………………….. in Cash Flow Statement

• Operating Activities

• Investing Activities

• Financing Activities

• None of these

Comprehensive income is best defined as;

• Net income excluding income from discontinued operations

• The change in net assets for the period including contributions by owners and distributions to owners

• Total revenues minus total expenses

• The change in net assets for the period excluding owner transactions