Jan showed the following financial items in 2007 and 2008: 2007 2008 Salary 22,000 20,000 Payroll taxes 4,000 3,500 Other inflexible expenses 11,000 11,000 Flexible expenses 6,000 5,300 In relation to 2007’s savings, Jan’s savings in 2008 A) decreased by $800. B) decreased by $200. C) increased by $200. D) increased by $800. […]
Siskiyou, Inc. has total current assets of $1,200,000; total current liabilities of $500,000; long-term assets of $800,000; and long-term debt of $600,000. How much is the firm’s total equity? A) $1,200,000 B) $900,000 C) $800,000 D) $2,000,000 ANSWER B
Two sisters each open IRAs in 2011 and plan to invest $3,000 per year for the next 30 years. Mary makes her first deposit on January 1, 2011, and will make all future deposits on the first day of the year. Jane makes her first deposit on December 31, 2011, and will continue to make […]
Which of the following is an example of an inflexible expense? A) Mortgage payments B) Entertainment C) Home maintenance D) Newspapers and magazines ANSWER A
Jan showed the following financial items at the ends of 2007 and 2085: 2007 2008 Checking account balance 1,300 1,200 Credit card balances due 700 500 Auto loan ($900 due within one year) 2,700 3,600 Automobile 7,000 8,000 Jewelry 400 300 Stamp collection 1,200 1,000 Jan’s net worth changed in 2008 by A) + $100. […]
Dissavings can A) decrease assets and net worth. B) decrease both assets and liabilities. C) decrease net worth only. D) decrease assets only or liabilities only. ANSWER A
Which of the following statements about federal flood insurance is true? A) It is available even if property has been previously flooded. B) It is unavailable in high-risk flood areas. C) It is available only for residences, not for businesses. D) Waiting periods are not used in the federal flood insurance program. ANSWER […]
All of the following statements about yacht insurance are true EXCEPT A) Property damage coverage includes damage from insects, weathering, and wear and tear. B) Liability coverage includes the cost of raising, removing, or destroying a sunken or wrecked yacht. C) Coverage can be added for maritime workers covered by the United States Longshoremen and […]
In relation to the balance sheet, an income statement shows A) net worth, not the period’s savings or dissavings. B) the period’s savings or dissavings, not net worth. C) activities at a point in time, not over a period of time. D) financial position, not financial performance. ANSWER B
A corporation has annual sales of $18 million, total assets of $4 million, a debt ratio of 40%, depreciation expense of $200,000, and a tax rate of 40%. The corporation’s total stockholders’ equity is equal to A) $2,800,000. B) $2,400,000. C) $1,800,000. D) $5,600,000. ANSWER B
