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WorksheetsFinal Exam CIM2102
Total questions: 30
Worksheet time: 3hrs 30mins
There are a number of reasons why a company would consider incorporation EXCEPT
gaining the use of additional cash without the owner putting in his/her own personal funds
removing legal liability from the individual and protecting his/her personal Assets
securing various tax advantages
reducing the size of his/her business
The ______ the current and quick ratios are the greater the probability that a company will be able to pay its debts in the near term
smaller
larger
There are two types of capital stock can be authorized by the state.
preferred stock and treasury stock
common stock and preferred stock
treasury stock and common stock
The rule of thumb is that the current ratio should be greater than______. The quick Asset ratio rule of thumb is that this ratio should be _____or larger.
1.5, 2.0
2.0, 1.5
______corporations depend on making money in order to continue into the future. ______corporations depend on gifts and grants from the public and private sectors for their continuation.
For-profit, Not-for-profit
Not-for-profit, For-profit
Stock rarely sold by a corporation for less than par value, either because______.
company rules
state laws
What is this?
stock bill
stock certificate
________ appears on the share certificate.
Par value
Market value
Dividends can be divided into two categories as______.
stock and cash
stock and shares
Dividends must be paid to ______stockholders before the _____ stockholders receive any further dividend.
preferred, common
common, preferred
What are reasons why a corporation may issue stock dividends instead of cash? EXCEPT
The company may not be sufficient cash to pay a cash dividend.
The company needs the cash for other purposes.
The company has too much cash on hand.
The stock split_______the number of shares outstanding and _______the stocks’ par value.
increases, decreases
decreases, increases
When a corporation buys back its own stock and does not cancel it or resell it, it is known as______stock.
common
preferred
treasury
capital
What is a term used to refer to both the common and preferred stock of a corporation which the company is initially authorized to issue when it receives its incorporation charter?
Treasury stock
Capital stock
What is the equation of Current Ratio?
Current Ratio = Current Assets/Current Liabilities
Current Ratio = Quick Assets/Current Liabilities
Current Ratio = Current Assets – Current Liabilities
What is the equation of Quick Ratio?
Quick Ratio = Current Assets/Current Liabilities
Quick Ratio = Total Assets/Current Liabilities
Quick Ratio = (Current Assets-Inventory-Prepaid Items)/Current Liabilities
_______is a cushion that allows management to make errors in its estimate of future cash receipts and disbursements and still be able to pay its debts when they fall due.
Inventory
Working capital
Account Receivable
What is the equation of Inventory Turnover Ratio?
Inventory Turnover Ratio = Cost of Goods Sold/Total Inventory
Inventory Turnover Ratio = Cost of Goods Sold/Average Inventory
What is the equation of Rate of return as a ratio?
Rate of return = Net Income/Average Stockholders’ or Owner’s Equity
Rate of return = Total Liabilities/Average Stockholders’ or Owner’s Equity
Rate of return = Total Assets/Average Stockholders’ or Owner’s Equity
What is the equation of Net Profit as a Percentage of Sales?
Net Profit as a Percentage of Sales = (Total Assets/Sales) x 100
Net Profit as a Percentage of Sales = (Net Income/Sales) x 100
Net Profit as a Percentage of Sales = (Cost of Goods Sold/Sales) x 100
What is a long-term financial analytical tool calculated by dividing Net income by the average number of common shares outstanding for the year?
Market Price Per Share
Earnings Per Share
Working Capital
The long-term financial analytical tool as follow EXCEPT
Net Profit as a Percentage of Sales
Number of Times Interest Was Earned
Acid Test Ratio
Price/Earnings Ratio
How to calculate Average Sales per Day?
Annual Sales/365
Quarter Sales/365
Month Sales/365
_______balance represents Net Income and _______ balance represents Net Loss
Credit, Debit
Debit, Credit
Cash Flows and Retained Earnings value in______.
Balance Sheet
Income Statement
What type of businesses that owner usually has not managerial responsibilities?
Proprietorship
Partnership
Corporation
______ is a detailed plan that outlines future expectations in quantitative terms.
Budget
Policy
________ is the development of future objectives and the preparation of budgets to meet these objectives. ________ involves ensuring that the objectives established during the planning phase are attained.
Planning, Control
Control, Planning
What is a network of many separate budgets that are interdependent?
Sales Budget
Capital Budget
Master Budget
What is the process of recording, classifying, and summarizing economic events through certain documents or financial statements?
Posting
Accounting
