For a firm with long-term debt, net income is equal to:

Pretax income (đã trừ I rồi) - Interest expense - Taxes.

Taxes + Addition to retained earnings.

Pretax income × (1 - Marginal tax rate).

Dividends + Addition to retained earnings.

The cash flow resulting from a firm's ongoing, normal business activities is referred to as the:

additions to net working capital.

cash flow to retained earnings.

Capital spending is equal to:

ending next fixed assets minus beginning net fixed assets.

ending net fixed assets minus beginning net fixed assets plus depreciation.

ending total assets minus beginning total assets.

ending total assets minus beginni

In the accounting statement of cash flows, which one of these is calculated by adding back noncash expenses to net income and adjusting for changes in current assets and liabilities?

cash flow from operating activities

cash flow from investing activities

cash flow from financing activities

Earnings per share will increase when:

depreciation decreases (dẫn đến thu nhập ròng tăng 😊)

the number of shares outstanding increase.

the average tax rate increases.

Which one of the following is a current liability?

amount due from a customer in 30 days

amount due to a supplier in 18 months

debt payable to a mortgage company in nine months

An increase in total assets:

must be offset by an equal increase in liabilities and stockholders' equity.

means that net working capital is also increasing.

requires an investment in fixed assets.

means that stockholders' equity must also increase.

can only occur when a firm has positive net income.

Which one of the following statements concerning liquidity is correct?

Balance sheet accounts are listed in order of decreasing liquidity.

If you sold an asset today, it was a liquid asset.

If you can sell an asset next year at a price equal to its actual value, the asset is highly liquid.

Trademarks and patents are highly liquid.

The less liquidity a firm has, the lower the probability the firm will encounter financial difficulties.

valuable to a firm even though liquid assets tend to be less profitable to own.

a measure of the use of debt in a firm's capital structure.

equal to current assets minus current liabilities.

equal to the market value of a firm's total assets minus its total liabilities.

generally associated with intangible assets.

is equivalent to market value for firms with fixed assets.

generally tends to exceed market value when fixed assets are included.

is more of a financial than an accounting valuation.

is adjusted to market value whenever the market value exceeds the stated book value.

If you sell an asset, you are most apt to receive which value for that asset?

original cost minus accumulated depreciation

As seen on an income statement:

depreciation reduces both the pretax income and the net income.

interest is deducted from income and increases the total taxes incurred.

the tax rate is applied to the earnings before interest and taxes when the firm has both depreciation and interest expenses.

depreciation is shown as an expense but does not affect the tax expense.

interest expense is added to earnings before interest and taxes to compute pretax income.

All else held constant, the earnings per share will:

decrease as the number of shares outstanding increase.

decrease as net income increases.

decrease as the total revenue of the firm increases.

increase as the tax rate increases.

decrease as the costs decrease.

Which one of these statements is correct?

Operating income is equal to operating revenue minus cost of goods sold.

Pretax income is equal to net income minus taxes.

The addition to retained earnings is equal to net income plus dividends.

Only current taxes are included in the tax expense.

Earnings per share can be negative but dividends per share cannot.

will increase if net income increases and number of shares outstanding decreases.

will increase if net income decreases and number of shares outstanding in

will increase if net income increases and number of shares outstanding decreases.

will increase if net income decreases and number of shares outstanding increases.

is defined as the addition to retained earnings divided by the number of shares outstanding.

is the total amount of dividends paid per year on a per share basis.

must increase at the same rate as the total operating revenue.

According to the Generally Accepted Accounting Principles, costs are:

matched with production levels.

expensed as management desires.

Depreciation for a profitable firm:

decreases net fixed assets, net income, and operating cash flows.

decreases net income by less than $1 for every $1 of depreciation expense.

increases the net fixed assets as shown on the balance sheet.

reduces both the net fixed assets and the costs of a firm.

is a non-cash expense which increases the net operating income.

An increase in which one of the following will cause the operating cash flow to increase for a profitable firm?

changes in the amount of net fixed capital

A firm starts its year with a positive net working capital. During the year, the firm acquires more short-term debt than it does short-term assets. This means that:

the ending net working capital will be negative.

both accounts receivable and inventory decreased during the year.

the beginning current assets were less than the beginning current liabilities.

accounts payable increased and inventory decreased during the year.

the ending net working capital can be positive, negative, or equal to zero.

The cash flow to creditors includes the firm's cash:

outflow when interest is paid on outstanding debt.

outflow when payments are paid to suppliers.

outflow when new debt is acquired.

inflow when accounts payable increases.

Inflow when long-term debt is paid off.

The cash flow to stockholders must be positive when:

the cash flow from assets is positive and also exceeds the cash flow to creditors.

the dividends paid are less than the amount of net new equity raised.

the net sale of common stock exceeds the amount of dividends paid.

no income is distributed but new shares of stock are sold.

both the cash flow to assets and the cash flow to creditors are positive.

Which one of these will increase the book value of the stockholders' equity in a profitable, non-dividend paying firm? Assume no shares of stock are repurchased or sold.

an increase in earnings per share

a decrease in the book value of inventory

an increase in the market value of the firm's buildings

an increase in the market value of the firm's long-term debt

An increase in the book value of inventory

an increase in the market value of the firm's buildings

an increase in earnings per share

an increase in the market value of the firm's long-term debt

an increase in non-cash expenses

Assets are listed on the balance sheet in order of:

market value relative to book value.

An increase in treasury stock:

results from a repurchase of outstanding shares of stock.

increases the total equity of the firm.

is the result of a firm issuing new shares to stock to the federal government.

increases the number of shares outstanding.

requires repayment at some point in the future.

The carrying value or book value of assets:

is determined under GAAP and is based on the cost of the asset.

represents the true market value according to GAAP.

is always the best measure of the company's value to an investor.

is always higher than the replacement cost of the assets.

is shown on the firm's income statement.

Under generally accepted accounting principles (GAAP), a firm's assets are reported at:

historical cost less accumulated depreciation.

market value less accumulated depreciation.

liquidation value less accumulated depreciation.

According to generally accepted accounting principles (GAAP), revenue is recognized as income when:

the transaction is complete and the goods or services are delivered.

a contract is signed to perform a service or deliver a good.

income taxes are paid on the revenue earned.

managers decide to recognize it.

Cash flow from assets:

can be positive, negative, or equal to zero.

equals net income plus non-cash items.

equals operating cash flow minus net capital spending.

equals the addition to retained earnings.

equals operating cash flow minus the cash flow to creditors.

Net capital spending is equal to the:

net change in fixed assets plus depreciation.

net change in total assets plus depreciation.

difference between the market and book values of the total assets.

Cash flow to stockholders is defined as:

cash dividends paid plus repurchases of equity minus new equity financing.

repurchases of equity less new equity sold minus cash dividends paid.

cash flow from financing less cash flow to creditors.

cash flow from assets plus cash flow to creditors.

cash that the firm can distribute to creditors and stockholders.

the money generated from the sale of new shares of stock.

another term for operating cash flow.

the cash generated by decreasing net working capital.

the net income of a firm after taxes have been paid.

meo cau co so 2

Authored by Khánh An Nguyễn

English

University

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which one of these equations is an accurate expression of the balance sheet?

Assets ≡ Liabilities - Stockholders' equity

Stockholders' equity ≡ Assets + Liabilities

Liabilities ≡ Stockholders' equity −Assets

Assets ≡ Stockholders' equity −Liabilities

Stockholders' equity ≡ Assets -Liabilities

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which one of these accounts is classified as a current asset on the balance sheet?

intangible asset

accounts payable

preferred stock

inventory

net plant and equipment

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

On a balance sheet, deferred taxes are classified as:

stockholders' equity.

a current asset.

a long-term liability.

a fixed asset.

a current liability.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Net working capital is defined as:

current assets plus fixed assets.

current assets plus stockholders' equity.

fixed assets minus long-term liabilities.

total assets minus total liabilities.

current assets minus current liabilities.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

An asset that can be quickly converted into cash without significant loss in value is referred to as being:

marketable.

tangible.

intangible.

liquid.

fixed.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The financial statement summarizing a firm's accounting performance over a period of time is the:

income statement.

balance sheet.

statement of cash flows.

tax reconciliation statement.

statement of equity.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Noncash items refer to:

the credit sales of a firm.

the accounts payable of a firm.

the costs incurred for the purchase of intangible fixed assets.

expenses charged against revenues that do not directly affect cash flow.

all accounts on the balance sheet other than cash on hand.

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meo cau co so 2

Which one of these equations is an accurate expression of the balance sheet?

Which one of these accounts is classified as a current asset on the balance sheet?

On a balance sheet, deferred taxes are classified as:

Net working capital is defined as:

An asset that can be quickly converted into cash without significant loss in value is referred to as being:

The financial statement summarizing a firm's accounting performance over a period of time is the:

Noncash items refer to:

For a firm with long-term debt, net income is equal to:

Which term defines the tax rate that applies to the next dollar of taxable income earned?

U.S. corporate taxes switch to a constant flat-rate tax once the average tax rate reaches:

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