Bustest2.pdf

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1 The __________ is an accounting statement that reports the financial condition of a firm at a specific point in time. c a. statement of cash flows b. trial balance c. balance sheet d. income statement , 2 The accounting book or computer program where each day's transactions are first recorded is called a(n): b a. general ledger b. journal c. balance sheet d. posting book 3 Earnings per share, return on sales, and return on equity are examples of: d a. equity ratios b. liquidity ratios c. leverage ratios d. profitability ratios , 4 Debts that are due in one year or less are classified on the Balance Sheet as: a a. current liabilities b. bonds payable c. account payable d. callable bonds 5 A ___________ provides a summary of cash coming into and money going out of a firm from operations activities, financing activities, and investing activities. d a. cash receivable and payable report b. budget plan c. income statement d. statement of cash flow 6 ___________ refers to the difference between cash coming into the firm and cash leaving the firm. b a. retained earnings b. cash flow c. accounts payable d. liquidity
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7 Net profit prefers to: d a. The result of deducting depreciation expense from revenues. b. The result of subtracting cost of good sold from revenues. c. The result of deducting liabilities from the assets of the firm. d. The net earnings after the deduction of all expenses, including tax expense. 8 __________ involves the review and evaluation of the records that are used to prepare the organization's financial statements. c a. managerial accounting b. financial accounting c. auditing d. certified bookkeeping 9 Resources that a firm owns are called: d a. equities b. cash c. revenues d. assets 10 The markets for laundry detergents, soft drinks, and automobiles are dominated by just a few sellers. Economists would classify these markets as examples of: b a. Monopolies b. Oligopolies c. Monopolistic competition. d. Perfect competition. 11 Apple sells its Apple Watch's sports bands for $49 each, yet it costs only $2.05 to manufacture. What is the difference between $49 and $2.05 called? d a. Net profits b. Cost of Goods Sold c. Net expense d. Gross Profits 12 If a firm has a debt to owners' equity ratio of .54 (or 54%) we can conclude that: b a. It has relied more on debt than equity to finance its operations. b. Its total liabilities are less than its owners' equity. c. The firm is likely to have trouble paying its short term debts when they come due. d. The firm has expenses that are exactly 54% of its gross profit.
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13 A firm's ________ reports the profit or loss for the firm over a specified time period. Select one: c a. bank statement b. balance sheet c. income statement d. cash flow statement 14 In order to understand if the results of ratio calculations indicate a financially strong company, the results: b a. Are compared to the norms established by generally accepted accounting principles.
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