BA301 Quiz 2 - BA301 Quiz 2 1. Which of the following is...

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Unformatted text preview: BA301 Quiz 2 1. Which of the following is true regarding balance sheets? A. They report, for a certain interval of time, the resources of a company, the obligations of a company, and the equity of the owners. B. They report, as of a certain point in time, the resources of a company, the obligations of a company, and the equity of the owners. C. They report, for a certain interval of time, the amount of cash generated and consumed by a company. D. They report, for a certain interval of time, the net assets generated, the net assets consumed, and the net income. E. They report, as of a certain point in time, the resources and net income of a company. 2. According to the Revenue Recognition Principle in GAAP: A. Companies can realize revenue only if the transaction is profitable B. Dividends can be paid only after taxable income is paid C. Companies can realize certain gains on their operating books, while omitting them from their tax books D. Revenue is recognized when a good or service is provided, not when the money is received E. Expenses can be realized when cash payment is made 3. Given the following data, identify the correct gross profit and operating profit. Assume no outside information other than that which is provided. Sales: $1500 Depreciation: $100 Interest Expense: $30 Cost of Goods Sold: $1000 SG&A: $150 Taxes: $70 A. Gross Profit = $250, Operating Profit = $150 B. Gross Profit = $500, Operating Profit = $250 C. Gross Profit = $400, Operating Profit = $220 D. Gross Profit = $400, Operating Profit = $250 E. Gross Profit = $500, Operating Profit = $150 4. Which of the following statements regarding the cash flow statement is true? A. Financing activities include ONLY long-term borrowings. B. Changes in accounts receivables is classified as cash flow from financing activity C. Depreciation is classified as a cash flow from financing activities. D. A typical company has a positive cash flow from investing activities....
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This note was uploaded on 09/01/2010 for the course BA 301 taught by Professor Woodridgeandgray during the Spring '10 term at Pennsylvania State University, University Park.

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BA301 Quiz 2 - BA301 Quiz 2 1. Which of the following is...

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