Offering discounts to accelerate the collection of accounts receivables in an example of which cash-related activity in the cash flow cycle? A) Operating activity B) Profitability activity C) Investing activity D) Financing activity ANSWER A
Liability arising out of which of the following is covered under the personal injury endorsement to the homeowners policy? A) bodily injury B) property damage C) slander D) professional liability ANSWER Answer: C
For which of the following situations would there be personal liability coverage under the homeowners policy? I. The named insured accidentally injures her husband with a hammer. II. The named insured breaks his wife’s valuable vase while practicing his golf swing. A) I only B) II only C) both I and II D) neither I […]
When developing a pro forma balance sheet which of the following is typically the LAST item to be estimated? A) inventory B) total assets C) external financing D) cash ANSWER C
If a corporation wants a guarantee that all of its shares of stock will be sold, it should use which of the following distribution methods? A) privileged subscription with no standby agreement B) competitive bid purchase C) direct sale D) commission or best-efforts contract ANSWER B
Your friend, John, believes that since capital markets are efficient, he doesn’t need to read the financial press or be involved in stock research before purchasing stocks for his portfolio. He simply throws darts at the stock pages and buys the stocks the darts hit. Is stock research and analysis important when buying and selling […]
________ refers to the ease with which a firm is able to tap-in to sources of capital. A) Shareholder control B) Financial flexibility C) Risk and timing D) Impact and cost ANSWER B
Benkart Corporation has sales of $5,000,000, net income of $800,000, total assets of $2,000,000, and 100,000 shares of common stock outstanding. If Benkart’s P/E ratio is 12, what is the company’s current stock price? A) $360 per share B) $240 per share C) $96 per share D) $60 per share ANSWER C
Nelson Industries has a higher debt ratio than Butler, Inc., and Nelson also has a higher times interest earned ratio than Butler. If Nelson and Butler both have the same amount of total assets, then A) Nelson may have more non-interest bearing liabilities, such as accounts payable, than Butler has. B) if both companies have […]
All of the following are considered insured locations for medical payments to others (Coverage F) under a homeowners policy EXCEPT A) a new vacation home purchased by an insured during the policy period. B) a motel room where an insured is temporarily residing. C) a hall rented by the insured for her daughter’s graduation party. […]