Balance Sheet Test Questions
Generally accepted accounting principles encompass the conventions, rules, and procedures
necessary to define accepted accounting practice at a particular time
Which of the following items has no effect on sto
Accounting Calculation Test Questions
Use this balance sheet and income statement to answer the following question. Use ending
balances whenever average balances are required for computing ratios.
Abner Systems, Inc.
December 31, 20x7
Cognition The mental act or process by which knowledge is acquired, including perception,
intuition, and reasoning.
Cognitive psychologists study:
Mental Imagery The ability to
Classifying Terms into Financial Statement Questions
The qualitative characteristic of reliability contains all the following features except
A) faithful representation
Accounting information should make a diff
Sales Communication as a Collaborative Process
Trust-based sales communication: A collaborative and two-way form of
communication that allows buyers and sellers to develop a better understanding of the
need situation and work togethe
Accounting Test Questions
1. The intentional preparation of misleading financial statements, known as fraudulent financial
reporting, can result from all of the following except
A) the intentioanl misapplication of accounting principles.
B) the manipulati
Obstacles to Problem Solving
Obstacles to Problem Solving:
o Tested Thinking A particular way of thinking about something
o A way that has been successful in the past
o Confirmed Thinking - Attending to information that confirms mental set
o Can result in
Types of Problem Solving
Trial and Error - Method of problem solving in which one solution after another is
tried until a successful one is found.
Also known as mechanical solution
Example: Have you ever forgotten a password? What do you
Present Value Cash Flow
Period Cash Flow
Discount rate = 8%
Lottery Example - Comparison of Lump Sum to 26 year payment stream
Choice: a. $3,628,451 today
b. $7,000,000 paid
Questions to Accomplish Objectives
Questions are used to Accomplish Objectives
Generate buyer involvement: make sure its not a one-sided conversation with only seller
Gather information: find out what buyers needs are
Advance the sale: want to gui
Calculating Actual Return
You purchased 1,000 shares of stock for $33 per share exactly one year ago. During the year, the
stock paid a $.50 dividend per share and the current stock price is $27 per share. The inflation
rate the last year was 2%. Answer t
Calculating Net Present Value
BMT has developed a new product. It can go into production for an initial investment of
$5,000,000. The equipment will be depreciated using straight-line depreciation over 4
years to a value of zero.
The firm believes that ne
Large Industries annual bonds are selling at 99 (i.e., the price is $990 for the $1,000
There are 8 years remaining until maturity on the bonds and the yield to maturity is
7.75%. Find the coupon rate. (Note: you may have to use a tria
Finding Current Exchange Rate
One year ago, an American investor bought 1000 shares of London Bridges at a price of
22 (or 22 UK pounds) per share when the exchange rate was $1.5/1 (or $1.50 dollars =
1 pound). The investor also invested 800,000 Japanese
Your uncle died last year and left you money in his will. You are to receive $50,000 next year (in
time 1) and $100,000 ten years from today (i.e., in time 10).
(a) What is the value of the inheritance today (in time 0) if the appropriate
Book Value of Equity:
Par value + Capital paid in excess of par
Book Value vs. Market Value
Book value is a backward looking measure.
o It tells us how much capital the firm has raised from shareholders in the
Finding Net Equity
Common Products has issued its $.005 par value stock in two separate financing transactions.
Transaction 1: five years ago, the founder of the company purchased 2,000,000 shares of stock
for $50,000. Transaction 2: last year the company
To buy stocks at Smartstocks.com, you need to first create an account. Use whatever name
and password you want to create this account
(note: you do not have to use your name or any real information about yourself).
This account is free to
Calculating the Required Rate of Return
The total book value of WTCs equity is $20 million and book value per share outstanding is
The stock of WTC is currently selling for a price of $25 per share and the beta of
WTC is .85.
The bonds of WTC have a
Semi-Strong Form of Market Efficiency
Find an announcement of new information made within a month from today (i.e., earnings
announcement, merger, etc.) for any publicly traded stock that moves the stock price at least 1%.
Print out or draw a chart that s