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Trading on the NYSE is
executed without a specialist (i.e. a market maker). (T/F) - ANSWER F
Stocks and bonds are two
types of financial instruments (T/F) - ANSWER T
The matching principle in
accrual accounting requires that:
a. Revenues be recognized
when the earnings process is complete and matches expenses to revenues
recognized.
b. Expenses are matched to
the year in which they are incurred
c. Revenues are matched to
the year in which they are booked
d. Revenues should be large
enough to match expenses - ANSWER a
A basic equation for the
balance sheet is:
a. Equity = Assets -
Liabilities
b. Liabilities = Equity +
Assets
c. Assets = Liabilities -
Equity
d. Assets = Equity - Liabilities
- ANSWER a
Why is the Balance Sheet
known as a permanent statement?
a. Because the statement is
sent to the SEC.
b. Because the other
statements are reset at the end of the fiscal year
c. Because it is printed
out and archived
d. Because it persists in
the minds of the shareholders. - ANSWER b
How do you calculate the
change in Retained Earnings?
a. Ending Retained Earnings
- Change in Cash
b. EBIT divided by Total
Assets + Dividends
c. EBIT - Change in Cash -
Dividends
d. Net Income - Dividends -
ANSWER d
Which of the following is
generally true?
a. Gross Profit and
Operating Income are the same
b. Cost of Goods Sold +
Operating Expenses = Net Income
c. Operating Income and
EBIT are the same
d. EBIT + Income Taxes =
Net income - ANSWER c
Which components are part
of total assets?
a. Cash, Accounts
Receivable, Short Term Debt
b. Cash Accounts
Receivable, Inventory, Long Term Assets
c. Accounts Payable, Long
Term Assets, Long Term Debt
d. Accounts Payable, Net
Income, Equity - ANSWER b
Which components are part
of current assets?
a. Cash, Accounts
Receivable, Property Plant & Equipment
b. Accounts Receivable,
Accounts Payable, Inventory
c. Long Term Debt, Property
Plant & Equipment, Common Stock
d. Inventory, Cash,
Accounts Receivable, Short Term Investments - ANSWER d
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