PRINCIPLES OF CORPORATE FINANCE 2026
PRACTICE QUESTION SET ONE
◉ Teck Technology Company is ready to make an initial public offer
of their stock. They must have had investment analysts review their
financial performance before the offering. Answer: True
◉ Financial statements for the Collins Corporation are presently
being developed. After they are completed, the corporate executives
can expect to look at which two main parts of the corporation's
finances? (Select all that apply.) Answer: equity statement
income statement
◉ Short-term capital is best described as capital that can be turned
into liquid - usable - funds in less than ____. Answer: one-year
◉ The bookkeeper for the ABC Company is recording every business
transaction made by ABC. She adds operating expenses, loan costs,
and investing information. It sounds as though the bookkeeper is
doing the job correctly. Answer: True
◉ An accountant is looking at the financial information for the first
quarter of this year for the ABC Corporation. He sees the company
has revenue of $75,000, expenses of $4,000, assets (a building) of
,$250,000, and liabilities of $15,000. The accountant does a cash-
flow analysis to forecast income for this year and estimates it to be
_____. Answer: $300,000
◉ The Little Maid Doll Company has assets of $50,000 and liabilities
of $2,000. Revenues this quarter were $15,000, with expenses of
$7,000. The company's net worth would be expressed as: _____.
Answer: $50,000/$2,000
◉ Mira watches the markets and advises clients to sell some shares
when she notices a downturn trend. Answer: stockbroker
◉ Jana looks at a client's information and advises that he should not
buy a commercial building this year. Answer: personal financial
advisor
◉ Terri is busy from the beginning of the year until after the first
quarter putting together and filing people's materials for the
Internal Revenue Service. Answer: tax preparation specialist
◉ Mack meets with the Clark family to talk about how best to work
with their parents' estate. Answer: investment advisor
, ◉ Eddie works for the Starr Battery Company, as part of their
business operations. What are the most likely positions he would
hold? (Select all that apply.) Answer: manufacturing the batteries
distributing the batteries
◉ A company's financial statement lists $3 million in equity. That
amount is most likely considered to be _____. Answer: capital
◉ Marketable securities are not securities that may be sold on a
public exchange. Answer: False
◉ In the world of finance, GAAP is used mainly because it _____.
Answer: is a way to standardize accounting procedures
◉ a method of inventory valuation Answer: LIFO
◉ a company van is now being used for two reasons: to drop
employees at a research facility and to deliver products to customers
once a week Answer: indirect cost
◉ a financial advisor believes a company's next six months will be
stronger than the past six Answer: forcast
PRACTICE QUESTION SET ONE
◉ Teck Technology Company is ready to make an initial public offer
of their stock. They must have had investment analysts review their
financial performance before the offering. Answer: True
◉ Financial statements for the Collins Corporation are presently
being developed. After they are completed, the corporate executives
can expect to look at which two main parts of the corporation's
finances? (Select all that apply.) Answer: equity statement
income statement
◉ Short-term capital is best described as capital that can be turned
into liquid - usable - funds in less than ____. Answer: one-year
◉ The bookkeeper for the ABC Company is recording every business
transaction made by ABC. She adds operating expenses, loan costs,
and investing information. It sounds as though the bookkeeper is
doing the job correctly. Answer: True
◉ An accountant is looking at the financial information for the first
quarter of this year for the ABC Corporation. He sees the company
has revenue of $75,000, expenses of $4,000, assets (a building) of
,$250,000, and liabilities of $15,000. The accountant does a cash-
flow analysis to forecast income for this year and estimates it to be
_____. Answer: $300,000
◉ The Little Maid Doll Company has assets of $50,000 and liabilities
of $2,000. Revenues this quarter were $15,000, with expenses of
$7,000. The company's net worth would be expressed as: _____.
Answer: $50,000/$2,000
◉ Mira watches the markets and advises clients to sell some shares
when she notices a downturn trend. Answer: stockbroker
◉ Jana looks at a client's information and advises that he should not
buy a commercial building this year. Answer: personal financial
advisor
◉ Terri is busy from the beginning of the year until after the first
quarter putting together and filing people's materials for the
Internal Revenue Service. Answer: tax preparation specialist
◉ Mack meets with the Clark family to talk about how best to work
with their parents' estate. Answer: investment advisor
, ◉ Eddie works for the Starr Battery Company, as part of their
business operations. What are the most likely positions he would
hold? (Select all that apply.) Answer: manufacturing the batteries
distributing the batteries
◉ A company's financial statement lists $3 million in equity. That
amount is most likely considered to be _____. Answer: capital
◉ Marketable securities are not securities that may be sold on a
public exchange. Answer: False
◉ In the world of finance, GAAP is used mainly because it _____.
Answer: is a way to standardize accounting procedures
◉ a method of inventory valuation Answer: LIFO
◉ a company van is now being used for two reasons: to drop
employees at a research facility and to deliver products to customers
once a week Answer: indirect cost
◉ a financial advisor believes a company's next six months will be
stronger than the past six Answer: forcast
