Test your luck

Which of the following is a function of a controller in a medium-to-large business?

• financial planning activities      

• financial accounting

• cash management

• credit management

On 2 January 2014 Fife Corp buys goods from O’Brien and agrees to pay for them within 60 days. On the balance sheet for Fife Corp at 2 January 2014 the amount owing to O’Brien would be reported as:

• accounts receivable

• accounts payable

• an advance payment by a customer

• an expense

• I don't know

The concept which permits information to be grouped together with other information as long as this does not mislead statement users in their decision making is called:

• materiality

• faithful presentation

• understandability

• consistency

A newly issued one-year security offered for sale by the issuing firm is classified as trading in both the

• primary market and the money market.

• primary market and the capital market.

• secondary market and the money market.

• secondary market and the capital market.

Which of the following is not an example of a financial intermediary

• Wisconsin S&L, a savings and loan association

• Strong Capital Appreciation, a mutual fund

• Microsoft Corporation, a software firm

• College Credit, a credit union

The premium charged to compensate for future interest rate fluctuations is called the

• inflation premium

• real rate of interest

• liquidity risk premium

• maturity risk premium

The statement of changes in equity:

• indicates the ability of the entity to generate cash flow.

• shows the selling price of the entity’s assets.

• shows how profit was determined.

• serves as a connecting link between the income statement and the balance sheet.

The purpose of financial markets is to facilitate savers depositing funds with financial intermediaries.

• True

• False

Which of these does not fit the accounting definition of an asset?

• Accounts receivable

• Staff skill and experience

• Goodwill

• Cash at bank

Thunder, Inc. has earnings before taxes of $7,500,000. Using the tax rate schedule from Table 4-2 in the textbook, calculate the tax obligation for Thunder, Inc.

• 
  

  $1,866,660

• 
  

  $2,925,000

• 
  

  $1,750,000

• 
  

  $2,550,000