finance quiz 2

finance quiz 2 - 1. Which of the following public...

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1. Which of the following public accounting firms no longer exists? A. KPMG B. PriceWaterHouse  Coopers C. Arthur Andersen D. Ernst and Young E. 2. Which of the following is an accurate description of the difference between current liabilities and  long-term liabilities? A. Current liabilities include accounts receivable and long-term liabilities include accounts  payable. B. Current liabilities are expected to be paid within one year whereas long-term liabilities  have maturities of longer than one year. C. Whether or not a liability is classified as current or long-term depends on its intended use. D. Debt is always classified as a long-term liability, regardless of maturity. E. Both current and long-term liabilities must be paid within one year. Which of the following correctly describes the expense recognition policy under US GAAP? A. Expenses are only recognized when they are paid AND the good or service has been  received. B. Expenses are recognized when they are paid. C. According to the matching concept, expenses incurred in providing a good or service are  recognized in the same period that the sale is made. D. Expenses are recognized when a company receives payment for a good or service. E. GAAP does not provide any guidance on expense recognition. 4. Given the following data, identify the correct gross profit and operating profit. Assume no outside  information other than that which is provided. Sales $500, Depreciation $25, Interest Expense $15,  A. Gross Profit = $400, Operating Profit = $225 B. Gross Profit = $400, Operating Profit = $250 C. Gross Profit = $350, Operating Profit = $325 D. Gross Profit = $250, Operating Profit = $210 E. Gross Profit = $350, Operating Profit = $250 . Which of the following is true regarding the statement of cash flow?
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A. Cash flow from operating activities is the primary source of cash. B. Cash flows from financing activities relate to the normal ongoing business of the company. C. Cash flow from operating activities represents the cash flows associated with investing  and disposing of plant assets. D. Cash flow comes from investing and financing activities. E. The net change in the cash account on the balance sheet from one year to the next is  reflected in the cash flow from operating activities 6. Activity ratios: A. Measure the extent to which a firm has financed its assets with non-owner sources of  capital B. Measure the mix of debt and equity in a company’s capital structure C. Assess the effectiveness with which a firm is managing its assets to generate sales D. Measure the ability of a company to pay its bills on time
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finance quiz 2 - 1. Which of the following public...

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