The ________ measure a firm’s performance over a specified period of time whereas a ________ provides a snapshot of the firm as of a specific date. A) income and balance sheets; cash flow statement B) balance sheet and cash flow statement; income statement C) income and cash flow statements; balance sheet D) None of the […]
Liability arising out of work performed by independent contractors is referred to as A) contractual liability. B) contingent liability. C) care, custody, and control liability. D) customer’s liability. ANSWER Answer: B
A favorable income variance indicates a monthly income A) equal to the budgeted monthly income. B) greater than budgeted monthly expenses. C) greater than budgeted monthly income. D) greater than accumulated income variances. ANSWER C
Examples of uses of cash include A) selling machinery. B) paying cash dividends to stockholders. C) borrowing an additional amount using a secured loan. D) all of the above ANSWER B
Because risk is measured by variability of returns, how long we hold our investments does not matter very much when it comes to reducing risk. Indicate whether the statement is true or false ANSWER FALSE
A customer was injured when a furnace exploded following its faulty installation by a heating and cooling business. For the heating and cooling business, this is an example of A) contingent liability. B) completed operations liability. C) products liability. D) contractual liability. ANSWER Answer: B
Pro forma financial statements may be valuable for which of the following reasons? A) To help us estimate how profitable a firm is expected to be B) To help determine if and how much debt financing is required C) To help banks determine if firms are likely to meet lending standards D) All of the […]
Based on the information in Table 4-2, and assuming the company’s stock price is $50 per share, the P/E ratio is A) 24.44. B) 27.50. C) 10.89. D) 14.33. ANSWER C
Tom opened a store in a mall. His store is located between a theater and a department store. Tom counts on the theater and department store to generate walk-in business at his store While his store has been successful, Tom knows that if either or both of the other businesses closed, his store would suffer […]
Beta represents the average movement of a company’s stock returns in response to a movement in the market’s returns. Indicate whether the statement is true or false ANSWER TRUE
