chap002 - Chapter 002 Financial Statements Taxes and Cash...

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Chapter 002 Financial Statements, Taxes and Cash Flow Multiple Choice Questions   1. The financial statement summarizing the value of a firm's equity on a particular date is the:  a. income statement. B . balance sheet. c. statement of cash flows. d. cash flow statement. e. dividend statement.   SECTION: 2.1 TOPIC: BALANCE SHEET TYPE: DEFINITIONS   2. A current asset is best defined as:    SECTION: 2.1 TOPIC: CURRENT ASSETS TYPE: DEFINITIONS   3. Net working capital is defined as:    SECTION: 2.1 TOPIC: NET WORKING CAPITAL TYPE: DEFINITIONS   2-1
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Chapter 002 Financial Statements, Taxes and Cash Flow 4. A(n) ____ asset is one which can be quickly converted into cash without significant loss in  value.    SECTION: 2.1 TOPIC: LIQUID ASSETS TYPE: DEFINITIONS   5. Financial leverage refers to the:  A . use of debt in a firm's capital structure. b. ratio of retained earnings to shareholders' equity. c. ratio of paid-in surplus to shareholders' equity. d. ratio of sales to total assets. e. ratio of current assets to long-term assets.   SECTION: 2.1 TOPIC: FINANCIAL LEVERAGE TYPE: DEFINITIONS   6. The common set of standards and procedures by which audited financial statements are  prepared is known as the:  a. Matching principle. b. Cash flow identity. C . Generally Accepted Accounting Principles (GAAP). d. Financial Leverage Reporting Principles (FLRP). e. Standard Market Value Guidelines (SMVG).   AACSB TOPIC: ETHICS SECTION: 2.2 TOPIC: GAAP TYPE: DEFINITIONS   2-2
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Chapter 002 Financial Statements, Taxes and Cash Flow 7. The financial statement summarizing a firm's performance over a period of time is the:  A . income statement. b. balance sheet. c. statement of cash flows. d. tax reconciliation statement. e. market value report.   SECTION: 2.2 TOPIC: INCOME STATEMENT TYPE: DEFINITIONS  
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