Foundations of Business Finance (Peregrine) exam with correct answers

Foundations of Business Finance (Peregrine) exam with correct answers True or false: The one fixed asset that is not depreciated is land because it seldom declines in value. -Correct Answer-True __________ liabilities are those due within one year. -Correct Answer-Current __________-__________ __________ liabilities are due after more than a year, and may include bonds, mortgages, and long-term loans. -Correct Answer-Long-term debt Name the three types of accounts listed as current liabilities on balance sheets. -Correct Answer-(1) Accounts Payable (2) Notes Payable (3) Accrued Expenses Accounts payable -Correct Answer-The amounts owed for credit purchases by a firm Notes payable -Correct Answer-Outstanding short-term loans, typically from commercial banks Accrued expenses -Correct Answer-Costs that have been incurred by a firm which have not yet been paid; examples of accruals include taxes owed to the government and unpaid wages The __________ __________ section of a balance sheet provides information about the claims against a firm held by investors who own preferred and common shares. -Correct Answer-Stockholders' equity The Stockholders' equity section of the balance sheet is reflected in four types of accounts. These include __________ __________, __________ __________, __________-__________-__________ __________ ___________ __________ __________, and __________ __________. -Correct Answer-(1) preferred stock (2) common stock (3) paid-in-capital excess of par (4) retained earnings __________ __________ shows the total proceeds from the sale of preferred stock. -Correct Answer-Preferred stock __________-__________-__________ __________ __________ __________ __________ equals the number of shares outstanding multiplied by the original selling price of the shares, net of the par value. -Correct Answer-Paid-in-capital in excess of par __________ __________ equals the number of outstanding common shares multiplied by the par value per share. -Correct Answer-Common stock __________ __________ (often $1) is an artifact of earlier pre-computer accounting methods used to track the number of outstanding shares. It has no relation to the actual value of the shares. -Correct Answer-Par value __________ __________ are the cumulative total of the earnings that the firm has reinvested in its assets and operations since its inception. -Correct Answer-Retained earnings The combined value of __________ __________ and __________-__________-__________ equals the proceeds the firm received when it originally sold shares to investors (including initial public offerings and rights offerings). -Correct Answer-common stock, paid-in-capital The __________ __________ entry on a balance sheet records the value of common shares that a firm currently holds in reserve. -Correct Answer-treasury stock The __________