Chap003[1] - Chapter 03 - Working with Financial Statements...

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Chapter 03 - Working with Financial Statements Chapter 03 Working with Financial Statements Answer Key Multiple Choice Questions 1. Activities of a firm which require the spending of cash are known as: A. sources of cash. B. uses of cash. C. cash collections. D. cash receipts. E. cash on hand. Refer to section 3.1 AACSB: N/A Difficulty: Basic Learning Objective: 3-1 Section: 3.1 Topic: Uses of cash 2. The sources and uses of cash over a stated period of time are reflected on the: A. income statement. B. balance sheet. C. tax reconciliation statement. D. statement of cash flows. E. statement of operating position. Refer to section 3.1 AACSB: N/A Difficulty: Basic Learning Objective: 3-1 Section: 3.1 Topic: Statement of cash flows 3-1
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Chapter 03 - Working with Financial Statements 3. A common-size income statement is an accounting statement that expresses all of a firm's expenses as percentage of: A. total assets. B. total equity. C. net income. D. taxable income. E. sales. Refer to section 3.2 AACSB: N/A Difficulty: Basic Learning Objective: 3-1 Section: 3.2 Topic: Common-size statement 4. Which one of the following standardizes items on the income statement and balance sheet relative to their values as of a common point in time? A. statement of standardization B. statement of cash flows C. common-base year statement D. common-size statement E. base reconciliation statement Refer to section 3.2 AACSB: N/A Difficulty: Basic Learning Objective: 3-1 Section: 3.2 Topic: Common-base year statement 3-2
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Chapter 03 - Working with Financial Statements 5. Relationships determined from a firm's financial information and used for comparison purposes are known as: A. financial ratios. B. identities. C. dimensional analysis. D. scenario analysis. E. solvency analysis. Refer to section 3.3 AACSB: N/A Difficulty: Basic Learning Objective: 3-2 Section: 3.3 Topic: Financial ratios 6. The formula which breaks down the return on equity into three component parts is referred to as which one of the following? A. equity equation B. profitability determinant C. SIC formula D. Du Pont identity E. equity performance formula Refer to section 3.4 AACSB: N/A Difficulty: Basic Learning Objective: 3-3 Section: 3.4 Topic: Du Pont identity 3-3
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Chapter 03 - Working with Financial Statements 7. The U.S. government coding system that classifies a firm by the nature of its business operations is known as the: A. NASDAQ 100. B. C. Standard Industrial Classification code. D. Governmental ID code. E. Government Engineered Coding System. Refer to section 3.5 AACSB: N/A Difficulty: Basic Learning Objective: 3-4 Section: 3.5 Topic: SIC codes 8. Which one of the following is a source of cash?
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Chap003[1] - Chapter 03 - Working with Financial Statements...

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