AGBM 408 Exam 1 PSU Question and
answers verified to pass
An income statement is a summary of revenue - correct answer ✔over a
period of time
cash accounting records - correct answer ✔when it happens
accrual accounting records - correct answer ✔when it is produced (even if
you do not sell it)
depreciation is an _________ expense - correct answer ✔operating
accrued interest is a ___________ - correct answer ✔liability
According to section 179 an asset can be depreciated _____ in the first year -
correct answer ✔100%
T/F principal payments are an expense - correct answer ✔fa;se
depreciation is an _______ expense - correct answer ✔operating
ROA tells - correct answer ✔how efficiently the operating managers manage
the assets
ROE tells - correct answer ✔the owners profitability of their investment
, Is ROA or ROE better to compare? - correct answer ✔ROE
Statement of cashflows is for - correct answer ✔a period of time
interest payments go in the _____ section of a cashflow - correct answer
✔outflow
T/F depreciation does not have a direct impact on cash flow but does help
lower the tax bill - correct answer ✔true
T/F principle payments effect income - correct answer ✔false
T/F interest payments lower income and have a negative impact on cash flow
- correct answer ✔true
Proforma means - correct answer ✔looking ahead a year or more
T/F repayment capacity is a more in depth look at liquidity - correct answer
✔true
TDRC - correct answer ✔For every dollar of principle and interest we have to
pay next year we have to pay X to cover outflows (higher the better)
Two ways to think about a loan obligation - correct answer ✔1. repayment
risk
2. loan collateral risk
Two classes of loan - correct answer ✔1. Finance current assets
answers verified to pass
An income statement is a summary of revenue - correct answer ✔over a
period of time
cash accounting records - correct answer ✔when it happens
accrual accounting records - correct answer ✔when it is produced (even if
you do not sell it)
depreciation is an _________ expense - correct answer ✔operating
accrued interest is a ___________ - correct answer ✔liability
According to section 179 an asset can be depreciated _____ in the first year -
correct answer ✔100%
T/F principal payments are an expense - correct answer ✔fa;se
depreciation is an _______ expense - correct answer ✔operating
ROA tells - correct answer ✔how efficiently the operating managers manage
the assets
ROE tells - correct answer ✔the owners profitability of their investment
, Is ROA or ROE better to compare? - correct answer ✔ROE
Statement of cashflows is for - correct answer ✔a period of time
interest payments go in the _____ section of a cashflow - correct answer
✔outflow
T/F depreciation does not have a direct impact on cash flow but does help
lower the tax bill - correct answer ✔true
T/F principle payments effect income - correct answer ✔false
T/F interest payments lower income and have a negative impact on cash flow
- correct answer ✔true
Proforma means - correct answer ✔looking ahead a year or more
T/F repayment capacity is a more in depth look at liquidity - correct answer
✔true
TDRC - correct answer ✔For every dollar of principle and interest we have to
pay next year we have to pay X to cover outflows (higher the better)
Two ways to think about a loan obligation - correct answer ✔1. repayment
risk
2. loan collateral risk
Two classes of loan - correct answer ✔1. Finance current assets
