The balance sheet equation is Total Assets = Total Revenues – Total Liabilities. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
In order to reduce agency problems, managers may be provided compensation that includes A) a fixed salary so managers’ pay is not at risk, allowing managers to focus on the company’s business. B) an option to buy the company’s stock. C) a bonus based on the level of profit achieved during the year. D) incentive […]
Date: September 19th, 2020
Financial intermediaries A) offer indirect securities. B) usually are underwriting syndicates. C) constitute the various secondary markets. D) include the national and regional stock exchange. ANSWER A
Date: September 19th, 2020
Total asset turnover is equal to accounts receivable turnover plus inventory turnover plus fixed asset turnover. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The accounting book value of an asset represents the historical cost of the asset rather than its current market value or replacement cost. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
All of the following contributed to recent financial crises EXCEPT A) Relying on the efficiency of financial markets. B) Focusing on earnings instead of cash flow. C) Focusing on the short run. D) Excessive risk taking due to underestimation of risk. ANSWER A
Date: September 19th, 2020
Financial ratios are useful for measuring performance because maximizing the return on equity for common shareholders is the primary goal of financial managers. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Prepare an income statement using the information given below. Make sure to identify gross profit, operating income, and net income. Inventories $50,000 Cost of Goods Sold $250,000 Administrative Expenses $50,000 Accumulated Depreciation $150,000 Sales $600,000 Depreciation Expense $25,000 Selling Expenses $150,000 Common Stock Dividends $8,000 Interest Expense $8,000 Corporate Tax Rate 40% ANSWER […]
Date: September 19th, 2020
The telecommunications system that provides a national information linkup among brokers and dealers operating in the over-the-counter market is called A) NASQ. B) NCIS. C) NSQA. D) NASDAQ. ANSWER D
Date: September 19th, 2020
How do gross profits, operating income, and net income relate to the areas of business activity reported in the income statement? What will be an ideal response? ANSWER The income statement begins with sales or revenue, from which we subtract the cost of goods sold (the cost of producing or acquiring the product […]
Date: September 19th, 2020
