BFIN Final (midterm questions)!
BFIN Final (midterm questions)
Which one of the following is the financial statement which shows the accounting
value of a firm's equity as of a particular date? (B-41; C-11)
a) Income statement
b) Creditor statement
c) Balance sheet
d) Statement of cash flows
e) Dividend statement - CORRECT ANSWER-Balance sheet
Net working capital is defined as: (B-42; C-12)
a) Total liabilities minus shareholders' equity
b) Current liabilities minus shareholders' equity
c) Fixed assets minus long-term liabilities
d) Total assets minus total liabilities
e) Current assets minus current liabilities - CORRECT ANSWER-Current assets
minus current liabilities
Which one of these set forth the common set of standards and procedures by
which audited financial statements are prepared? (B-
43; C-13)
a) The Matching Principle
b) The Cash Flow Identity
c) Generally Accepted Accounting Principles
d) Financial Accounting Reporting Principles
e) Standard Accounting Value Guidelines - CORRECT ANSWER-Generally
accepted accounting principles
Which one of the following accounts is the most liquid? (B-44; C-14)
a) Inventory
b) Building
c) Accounts Receivable
d) Equipment
e) Land - CORRECT ANSWER-Accounts Receivable
Page 1 of 18
,BFIN Final (midterm questions)!
The process of planning and managing a firm's long-term investment is called:
(B-45; C-15)
a) Capital Budgeting
b) Working Capital
c) Profit Maximization
d) Capital Structure
e) Investing - CORRECT ANSWER-Capital budgeting
Which of the following forms of business organization is subject to double
taxation? (B-46; C-16)
a) Corporation
b) Partnership
c) Limited Partnership
d) Sole Proprietorship
e) Shareholders - CORRECT ANSWER-Corporation
Technically, control of a firm ultimately rests with. . (B-47; C-17)
a) CEO
b) SEC
c) Shareholders
d) New York State Companies Registry
e) CFO - CORRECT ANSWER-Shareholders
Which of the following should a financial manager take into account when
considering an opportunity? (B-48; C-18)
a) How much cash they expect to receive
b) When will they receive the funds
c) How likely they are to receive the funds
d) All of the above
e) None of the above - CORRECT ANSWER-All of the above
Which one is a financial leverage ratio? (B-49; C-19)
a) Current ratio
b) Profit margin
c) Price to book value
d) Debt to equity
e) Inventory turnover - CORRECT ANSWER-Debt to equity
Page 2 of 18
, BFIN Final (midterm questions)!
Which of the following ratios are considered market-based ratios? (B-50; C-20)
a) P/E ratio
b) P/BV ratio
c) Profit margin
d) Both a and b
e) All of the above - CORRECT ANSWER-Both a & b
Noncash items refer to: (B-1; C-21)
a) Accrued expenses
b) Inventory items purchased using credit
c) The ownership of intangible assets such as patents
d) Expenses which do not directly affect net cash flows
e) Sales which are made using store credit - CORRECT ANSWER-The
ownership of intangible assets such as patents
Which of the following are current assets? (B-2; C-22)
I. Cash
II. Trademark
III. Accounts Receivable
IV. Notes Payable
a) II and III only
b) I and III only
c) I, II, and IV only
d) I, III, and IV only
e) II, III, and IV only - CORRECT ANSWER-I and III only
Which of the following are included in current liabilities? (B-3; C-23)
I. Note payable to a supplier in 13 months
II. Amount due from a customer last week
III. Account payable to a supplier that is due next week
IV. Loan payable to the bank in 10 months
a) I and III only
b) III and IV only
c) I, II, and III only
Page 3 of 18
BFIN Final (midterm questions)
Which one of the following is the financial statement which shows the accounting
value of a firm's equity as of a particular date? (B-41; C-11)
a) Income statement
b) Creditor statement
c) Balance sheet
d) Statement of cash flows
e) Dividend statement - CORRECT ANSWER-Balance sheet
Net working capital is defined as: (B-42; C-12)
a) Total liabilities minus shareholders' equity
b) Current liabilities minus shareholders' equity
c) Fixed assets minus long-term liabilities
d) Total assets minus total liabilities
e) Current assets minus current liabilities - CORRECT ANSWER-Current assets
minus current liabilities
Which one of these set forth the common set of standards and procedures by
which audited financial statements are prepared? (B-
43; C-13)
a) The Matching Principle
b) The Cash Flow Identity
c) Generally Accepted Accounting Principles
d) Financial Accounting Reporting Principles
e) Standard Accounting Value Guidelines - CORRECT ANSWER-Generally
accepted accounting principles
Which one of the following accounts is the most liquid? (B-44; C-14)
a) Inventory
b) Building
c) Accounts Receivable
d) Equipment
e) Land - CORRECT ANSWER-Accounts Receivable
Page 1 of 18
,BFIN Final (midterm questions)!
The process of planning and managing a firm's long-term investment is called:
(B-45; C-15)
a) Capital Budgeting
b) Working Capital
c) Profit Maximization
d) Capital Structure
e) Investing - CORRECT ANSWER-Capital budgeting
Which of the following forms of business organization is subject to double
taxation? (B-46; C-16)
a) Corporation
b) Partnership
c) Limited Partnership
d) Sole Proprietorship
e) Shareholders - CORRECT ANSWER-Corporation
Technically, control of a firm ultimately rests with. . (B-47; C-17)
a) CEO
b) SEC
c) Shareholders
d) New York State Companies Registry
e) CFO - CORRECT ANSWER-Shareholders
Which of the following should a financial manager take into account when
considering an opportunity? (B-48; C-18)
a) How much cash they expect to receive
b) When will they receive the funds
c) How likely they are to receive the funds
d) All of the above
e) None of the above - CORRECT ANSWER-All of the above
Which one is a financial leverage ratio? (B-49; C-19)
a) Current ratio
b) Profit margin
c) Price to book value
d) Debt to equity
e) Inventory turnover - CORRECT ANSWER-Debt to equity
Page 2 of 18
, BFIN Final (midterm questions)!
Which of the following ratios are considered market-based ratios? (B-50; C-20)
a) P/E ratio
b) P/BV ratio
c) Profit margin
d) Both a and b
e) All of the above - CORRECT ANSWER-Both a & b
Noncash items refer to: (B-1; C-21)
a) Accrued expenses
b) Inventory items purchased using credit
c) The ownership of intangible assets such as patents
d) Expenses which do not directly affect net cash flows
e) Sales which are made using store credit - CORRECT ANSWER-The
ownership of intangible assets such as patents
Which of the following are current assets? (B-2; C-22)
I. Cash
II. Trademark
III. Accounts Receivable
IV. Notes Payable
a) II and III only
b) I and III only
c) I, II, and IV only
d) I, III, and IV only
e) II, III, and IV only - CORRECT ANSWER-I and III only
Which of the following are included in current liabilities? (B-3; C-23)
I. Note payable to a supplier in 13 months
II. Amount due from a customer last week
III. Account payable to a supplier that is due next week
IV. Loan payable to the bank in 10 months
a) I and III only
b) III and IV only
c) I, II, and III only
Page 3 of 18
