(完整版)财务管理CHAPTER2.pdf

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1、CHAPTER 2 Financial Statements, Taxes, and Cash Flow II. CONCEPTS TANGIBLE ASSET d 21. A computer used in a business office by the office manager is classified as: a. a current asset. b. an intangible asset. c. net working capital. d. a tangible asset. e. an inventory item. CURRENT ASSETS a 22. Whic

2、h of the following are included in current assets? I. equipment II. inventory III. accounts payable IV. cash a. II and IV only b. I and III only c. I, II, and IV only d. III and IV only e. II, III, and IV only 精品资料 - - - 欢迎下载 - - - - - - - - - - - 欢迎下载 名师归纳 - - - - - - - - - -第 1 页，共 32 页 - - - - -

3、- - - - - CURRENT LIABILITIES b 23. Which of the following are included in current liabilities? I. note payable to a supplier in eighteen months II. debt payable to a mortgage company in nine months III. accounts payable to suppliers IV. loan payable to the bank in fourteen months a. I and III only

4、b. II and III only c. III and IV only d. II, III, and IV only e. I, II, and III only NET WORKING CAPITAL c 24. Which one of the following statements concerning net working capital is correct? a. Net working capital is negative when current assets exceed current liabilities. b. Net working capital in

5、cludes cash, accounts receivables, fixed assets, and accounts payable. c. Inventory is a part of net working capital. d. The change in net working capital is equal to the beginning net working capital minus the ending net working capital. e. Net working capital includes accounts from the income stat

6、ement. NET WORKING CAPITAL a 25. Which one of the following statements concerning net working capital is correct? a.The greater the net working capital, the greater the ability of a firm to meet its short-term obligations. b.The change in net working capital is equal to current assets minus current

7、liabilities. c.Depreciation must be added back to current assets when computing the change in net working capital. d.Net working capital is equal to long-term assets minus long-term liabilities. e.Net working capital is a part of the operating cash flow. BALANCE SHEET d 26. An increase in total asse

8、ts: a.means that net working capital is also increasing. b.requires an investment in fixed assets. c.means that shareholders equity must also increase.d.must be offset by an equal increase in liabilities and shareholders equity.e.can only occur when a firm has positive net income. LIQUIDITY c 27. Wh

9、ich one of the following accounts is the most liquid? a. inventory b.building 精品资料 - - - 欢迎下载 - - - - - - - - - - - 欢迎下载 名师归纳 - - - - - - - - - -第 2 页，共 32 页 - - - - - - - - - - c.accounts receivable d.equipment e.patent 精品资料 - - - 欢迎下载 - - - - - - - - - - - 欢迎下载 名师归纳 - - - - - - - - - -第 3 页，共 32 页

10、 - - - - - - - - - - BALANCE SHEET b 28. Which of the following accounts generally increase in value when a firm sells shares of its common stock at a price in excess of par value? I. retained earnings II.paid-in surplus III.common stock IV.preferred stock a. I and II only b. II and III only c. III

11、and IV only d. I, II, and III only e. II, III, and IV only LIQUIDITY e 29. Which one of the following statements concerning liquidity is correct? a.If you can sell an asset today, it is a liquid asset. b.If you can sell an asset next year at a price equal to its actual value, the asset is highly liq

12、uid. c.Trademarks and patents are highly liquid. d.The less liquidity a firm has, the lower the probability the firm will encounter financial difficulties. e.Balance sheet accounts are listed in order of decreasing liquidity. LIQUIDITY d 30. Liquidity is: a. a measure of the use of debt in a firms c

13、apital structure. b.equal to current assets minus current liabilities. c.equal to the market value of a firms total assets minus its current liabilities.d.valuable to a firm even though liquid assets tend to be less profitable to own. e.generally associated with intangible assets. SHAREHOLDERSEQUITY

14、d 31. Which of the following accounts are included in shareholders equity?I. interest paid II. retained earnings III. paid in surplus IV. long-term debt a. I and II only b. II and IV only c. I and IV only d. II and III only e. I and III only 精品资料 - - - 欢迎下载 - - - - - - - - - - - 欢迎下载 名师归纳 - - - - -

15、- - - - -第 4 页，共 32 页 - - - - - - - - - - 精品资料 - - - 欢迎下载 - - - - - - - - - - - 欢迎下载 名师归纳 - - - - - - - - - -第 5 页，共 32 页 - - - - - - - - - - SHAREHOLDERSEQUITYc 32. Shareholders equity:a. includes common stock, paid in surplus, retained earnings, and long-term debt. b.on a balance sheet is equivale

16、nt to the market value of the outstanding shares of stock. c.includes all of a firms earnings retained by the firm to date.d.increases, all else equal, when the dividends paid are greater than the net income for a year. e.includes the book value of any bonds issued by the firm. FINANCIAL LEVERAGE b

17、33. The higher the degree of financial leverage employed by a firm, the: a.lower the probability that the firm will encounter financial distress. b.greater the amount of debt incurred. c.greater the number of shares of common stock issued. d.greater the cash flow to creditors each year. e. lower the

18、 potential gains to shareholders. BOOK VALUE b 34. Book value: a. is equivalent to market value for firms with fixed assets. b.is based on historical cost. c.generally tends to exceed market value when fixed assets are included. d.is more of a financial than an accounting valuation. e.is adjusted to

19、 market value whenever the market value exceeds the stated book value. MARKET VALUE a 35. When making financial decisions related to assets, you should: a.always consider market values. b.place more emphasis on book values than on market values. c.rely primarily on the value of assets as shown on th

20、e balance sheet. d.place primary emphasis on historical costs. e.only consider market values if they are less than book values. INCOME STATEMENT d 36. As seen on an income statement: a.interest is deducted from income and increases the total taxes incurred. b.the tax rate is applied to the earnings

21、before interest and taxes when the firm has both depreciation and interest expenses. c.depreciation is shown as an expense but does not affect the taxes payable. d.depreciation reduces both the taxable income and the net income. e.interest expense is added to earnings before interest and taxes to ge

22、t taxable income. 精品资料 - - - 欢迎下载 - - - - - - - - - - - 欢迎下载 名师归纳 - - - - - - - - - -第 6 页，共 32 页 - - - - - - - - - - EARNINGS PER SHARE a 37. The earnings per share will: a. increase as net income increases. b.increase as the number of shares outstanding increase. c.decrease as the total revenue of

23、 the firm increases. d.increase as the tax rate increases. e.decrease as the costs decrease. 精品资料 - - - 欢迎下载 - - - - - - - - - - - 欢迎下载 名师归纳 - - - - - - - - - -第 7 页，共 32 页 - - - - - - - - - - DIVIDENDS PER SHARE e 38. Dividends per share: a. increase as the net income increases as long as the numbe

24、r of shares outstanding remains constant. b.decrease as the number of shares outstanding decrease, all else constant. c.are inversely related to the earnings per share. d.are based upon the dividend requirements established by Generally Accepted Accounting Procedures. e.are equal to the amount of ne

25、t income distributed to shareholders divided by the number of shares outstanding. REALIZATION PRINCIPLE b 39. According to Generally Accepted Accounting Principles, a.income is recorded based on the matching principle. b.income is recorded based on the realization principle. c.costs are recorded bas

26、ed on the liquidity principle. income is recorded based on the realization principle. e.depreciation is recorded as it affects the cash flows of a firm. MATCHING PRINCIPLE c 40. According to Generally Accepted Accounting Principles, costs are: a. recorded as incurred. b. recorded when paid. c. match

27、ed with revenues. d. matched with production levels. e. expensed as management desires. NONCASH ITEMSa 41. Depreciation: a. is a noncash expense that is recorded on the income statement. b.increases the net fixed assets as shown on the balance sheet. c.reduces both the net fixed assets and the costs

28、 of a firm. d.is a non-cash expense which increases the net operating income. e.decreases net fixed assets, net income, and operating cash flows. FIXED COSTS c 42. Fixed costs in the short-run generally include which of the following? I. manufacturing wages II. cost of materials used in production I

29、II. property insurance IV.contractually determined management salaries a. I and II only b.II and III only c.III and IV only 精品资料 - - - 欢迎下载 - - - - - - - - - - - 欢迎下载 名师归纳 - - - - - - - - - -第 8 页，共 32 页 - - - - - - - - - - d.I and IV only e.II and IV only 精品资料 - - - 欢迎下载 - - - - - - - - - - - 欢迎下载

30、名师归纳 - - - - - - - - - -第 9 页，共 32 页 - - - - - - - - - - MARGINAL TAX RATE c 43. When you are making a financial decision, the most relevant tax rate is the _ rate. a. average b.fixed c.marginal d.total e.variable CASH FLOW FROM ASSETS e 44. The cash flow from assets is equal to: a. operating cash f

31、low minus the change in net working capital plus net capital spending. b. cash flow to creditors minus the cash flow to shareholders. c. earnings before interest and taxes plus depreciation plus taxes. d. earnings before interest and taxes plus depreciation plus taxes minus net capital spending minu

32、s the change in net working capital. e. earnings before interest and taxes plus depreciation minus taxes minus net capital spending minus the change in net working capital. CASH FLOW FROM ASSETS a 45. An increase in which one of the following will cause the cash flow from assets to increase? a. depr

33、eciation b.change in net working capital working capital d.taxes e.costs CASH FLOW FROM ASSETS b 46. Cash flow from assets must be negative when: a. the firm has a taxable loss for the year. b. the cash flow from creditors and the cash flow from stockholders are both negative. c. the cash flow from

34、creditors is negative and the cash flow from stockholders is positive. d. the change in net working capital exceeds the net capital spending. e. operating cash flow is less than the change in net working capital. OPERATING CASH FLOW d 47. Assume a firm has depreciation, taxes, and interest expense.

35、In this case, operating cash flow: a. is the same as net income. b.is the same as net income plus depreciation. c.must be positive because depreciation is added to the taxable income. 精品资料 - - - 欢迎下载 - - - - - - - - - - - 欢迎下载 名师归纳 - - - - - - - - - -第 10 页，共 32 页 - - - - - - - - - - d.can be positi

36、ve, negative, or equal to zero. e.is equal to the cash flow to creditors. 精品资料 - - - 欢迎下载 - - - - - - - - - - - 欢迎下载 名师归纳 - - - - - - - - - -第 11 页，共 32 页 - - - - - - - - - - CHANGE IN NET WORKING CAPITAL e 48. A firm starts its year with a positive net working capital. During the year, the firm acq

37、uires more short-term debt than it does short-term assets. This means that: a. the ending net working capital will be negative. b. both accounts receivable and inventory decreased during the year. c. the beginning current assets were less than the beginning current liabilities. d. accounts payable i

38、ncreased and inventory decreased during the year. e. the ending net working capital can be positive, negative, or equal to zero. NET CAPITAL SPENDING b 49. Net capital spending: a. is negative if the sale of fixed assets is greater than the acquisition of current assets. b.is equal to zero if the de

39、crease in the fixed assets account is equal to the depreciation expense for the period. c. reflects the net changes in total assets over a stated period of time. d. is equivalent to the cash flow from assets. e. is equal to the ending net fixed assets minus the beginning net fixed assets. CASH FLOW

40、TO CREDITORS c 50. The cash flow to creditors includes the cash: a.received by the firm when payments are paid to suppliers. b.outflow of the firm when new debt is acquired. c. outflow when interest is paid on outstanding debt. d. inflow when accounts payable decreases. e. received when long-term de

41、bt is paid off. CASH FLOW TO STOCKHOLDERS a 51. Cash flow to stockholders must be positive when: a.the dividends paid exceed the net new equity raised. b.the net sale of common stock exceeds the amount of dividends paid. c.no income is distributed but new shares of stock are sold. d.both the cash fl

42、ow to assets and the cash flow to creditors are negative. e.both the cash flow to assets and the cash flow to creditors are positive. III. PROBLEMS CURRENT ASSETS b 52. A firm has $300 in inventory, $600 in fixed assets, $200 in accounts receivables, $100 in accounts payable, and $50 in cash. What i

43、s the amount of the current assets? a. $500 b. $550 c. $600 d. $1,150 精品资料 - - - 欢迎下载 - - - - - - - - - - - 欢迎下载 名师归纳 - - - - - - - - - -第 12 页，共 32 页 - - - - - - - - - - e. $1,200 精品资料 - - - 欢迎下载 - - - - - - - - - - - 欢迎下载 名师归纳 - - - - - - - - - -第 13 页，共 32 页 - - - - - - - - - - TOTAL LIABILITIES

44、d 53. A firm has net working capital of $350. Long-term debt is $600, total assets are $950 and fixed assets are $400. What is the amount of the total liabilities? a. $200 b. $400 c. $600 d. $800 e. $1,200 SHAREHOLDERSEQUITYc 54. A firm has common stock of $100, paid-in surplus of $300, total liabil

45、ities of $400, current assets of $400, and fixed assets of $600. What is the amount of the shareholders equity?a. $200 b. $400 c. $600 d. $800 e. $1,000 NET WORKING CAPITAL b 55. The total assets are $900, the fixed assets are $600, long-term debt is $500, and short-term debt is $200. What is the am

46、ount of net working capital? a. $0 b. $100 c. $200 d. $300 e. $400 NET WORKING CAPITAL c 56. Shareholders equity in a firm is $500. The firm owes a total of $400 of which 75 percent is payable within the next year. The firm has net fixed assets of $600. What is the amount of the net working capital?

47、 a. -$200 b. -$100 c. $0 d. $100 e. $200 LIQUIDITY d 57. Brads Co.has equipment with a book value of $500 that could be sold today at a 50 percent discount. Their inventory is valued at $400 and could be sold to a competitor for that amount. The firm has $50 in cash and customers owe them $300. What

48、 is the accounting value of their liquid assets? a. $50 精品资料 - - - 欢迎下载 - - - - - - - - - - - 欢迎下载 名师归纳 - - - - - - - - - -第 14 页，共 32 页 - - - - - - - - - - b. $350 c. $700 d. $750 e. $1,000 精品资料 - - - 欢迎下载 - - - - - - - - - - - 欢迎下载 名师归纳 - - - - - - - - - -第 15 页，共 32 页 - - - - - - - - - - BOOK VAL

49、UE c 58. Martha s Enterprises spent $2,400 to purchase equipment three years ago. This equipment is currently valued at $1,800 on todays balance sheet but could actually be sold for $2,000. Net working capital is $200 and long-term debt is $800. What is the book value of shareholdersequity?a.$200 b.

50、$800 c.$1,200 d.$1,400 e. The answer cannot be determined from the information provided. MARKET VALUE b 59. Recently, the owner of Marthas Wares encountered severe legal problems and is trying to sell her business. The company built a building at a cost of $1.2 million that is currently appraised at