Cumulative Graded Midterm Exam-2-16

Cumulative Graded Midterm Exam-2-16 - Question 3 Correct...

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Question 3 Correct 5.00 points out of 5.00 Question 4 Correct 5.00 points out of 5.00 Question 5 Correct 5.00 points out of 5.00 Return on equity increases when the expected rate of return from the acquired assets is higher than the interest rate on the debt issued to finance the acquired assets. Select one: True False The correct answer is 'True'. Comparative financial statements in which each amount is expressed as a percentage of a base amount, and in which the base amount is expressed as 100%, are called: Select one: a. Comparative statements. b. Common­size comparative statements. c. General­purpose financial statements. d. Base line statements. e. Index statements. The correct answer is: Common­size comparative statements. The ability to generate positive market expectations is called: Select one: a. Liquidity and efficiency. b. Liquidity and solvency. c. Profitability. d. Market prospects. e. Creditworthiness. The correct answer is: Market prospects.
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Question 6 Correct 5.00 points out of 5.00 Question 7 Correct 5.00 points out of 5.00 Preferred stock on which the right to receive dividends is forfeited for any year that the dividends are not declared is called: Select one: a. Noncumulative preferred stock. b. Participating preferred stock. c. Callable preferred stock. d. Cumulative preferred stock. e. Convertible preferred stock. The correct answer is: Noncumulative preferred stock. Bonds that have an option exercisable by the issuer to retire them at a stated dollar amount prior to maturity are known as: Select one: a. Convertible bonds. b. Sinking fund bonds. c. Callable bonds. d. Serial bonds. e. Junk bonds. The correct answer is: Callable bonds.
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Question 8 Correct 5.00 points out of 5.00 Question 9 Correct 5.00 points out of 5.00 A corporation was formed on January 1. The corporate charter authorized 100,000 shares of $10 par value common stock. During the first month of operation, the corporation issued 300 shares to its attorneys in payment of a $5,000 charge for drawing up the articles of incorporation. The entry to record this transaction would include: Select one: a. A debit to Organization Expenses for $3,000. b. A debit to Organization Expenses for $5,000. c. A credit to Common Stock for $5,000. d. A credit to Paid­in Capital in Excess of Par Value, Common Stock for $5,000. e. A debit to Paid­in Capital in Excess of Par Value, Common Stock for $2,000. The correct answer is: A debit to Organization Expenses for $5,000. General­purpose financial statements include the (1) income statement, (2) balance sheet, (3) statement of changes in equity (or statement of retained earnings), (4) statement of cash flows, and (5) notes to these statements. Select one: True False The correct answer is 'True'.
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Question 10 Correct 5.00 points out of 5.00 Question 11 Correct 5.00 points out of 5.00 Refer to the figure above. Calculate gross profit for the period in question.
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