FIN 305 WEEK 5 EXAM 3 REQUIRES
RESPONDUS LOCKDOWN BROWSER AND
WEBCAM 2026 MOCK EXAM PRACTICE SET
HIGH YIELD TOPICS A+
◉ What is on a balance sheet? Answer: Assets, Liabilities, Equity
◉ What are assets? Answer: These are items of ownership having
economic value
◉ For which of the following would one expect the book value of the
asset to differ widely from its market value?
1. Cash
2. Accounts receivable
3. Inventory
4. Fixed assets Answer: 4. Fixed assets
◉ What are liabilities? Answer: These are claims against assets
◉ What is equity? Answer: This is the difference between values of
assets and liabilities
,◉ What is the formula for a balance sheet? Answer: Assets =
Liabilities + Equity
◉ What are the components of equity? Answer: 1. Preferred stock
2. common stock
3. paid-in capital
4. retained earnings
◉ What are retained earnings? Answer: This is the cumulative net
income that the company has earned
◉ How do you find a company's total number of assets off of the
balance sheet? Answer: Total assets = current assets + long-term
assets
◉ How do you find a company's total equity? Answer: Total equity =
Preferred stock + Common stock + PIC + Retained Earnings
◉ People borrow money because they expect Answer: Their
purchases to give them satisfaction that compensates them for the
interest payments charged on the loans
,◉ The higher the interest rate, the (larger/smaller) the future value
will be. Answer: larger
◉ When calculating the number of years needed to grow an
investment to a specific amount of money: Answer: The higher the
interest rate, the shorter the time period needed to achieve the
growth
◉ Which of the following will NOT increase a present value?
1. Increase the interest rate
2. Decrease the number of periods
3. Increase the future value
4. None of these answers are correct Answer: 1. Increase the interest
rate
◉ When computing the FV of an annuity, the higher the
compounding frequency, the (higher/lower) the FV will be Answer:
higher
◉ Everything being equal, you would rather be:
1. The receiver of an annuity due
2. The payer of an ordinary annuity
, 3. The receiver of an ordinary annuity
4. The payer of an annuity due Answer: 1. The receiver of an annuity
due
◉ The present value of annuity payments made far into the future is
worth Answer: very little today
◉ You are evaluating the balance sheet for Goodman's Bees
Corporation. From the balance sheet you find the following balances:
cash and marketable securities = $400,000, accounts receivable =
$1,200,000, inventory = $2,100,000, accrued wages and taxes =
$500,000, accounts payable = $800,000, and notes payable =
$600,000.
Calculate Goodman Bees' net working capital. Answer: Net working
capital = 1,800,000
Net working capital = current assets - current liabilities
◉ Casello Mowing & Landscaping's year-end 2015 balance sheet
lists current assets of $435,200, fixed assets of $550,800, current
liabilities of $416,600, and long-term debt of $314,500.
RESPONDUS LOCKDOWN BROWSER AND
WEBCAM 2026 MOCK EXAM PRACTICE SET
HIGH YIELD TOPICS A+
◉ What is on a balance sheet? Answer: Assets, Liabilities, Equity
◉ What are assets? Answer: These are items of ownership having
economic value
◉ For which of the following would one expect the book value of the
asset to differ widely from its market value?
1. Cash
2. Accounts receivable
3. Inventory
4. Fixed assets Answer: 4. Fixed assets
◉ What are liabilities? Answer: These are claims against assets
◉ What is equity? Answer: This is the difference between values of
assets and liabilities
,◉ What is the formula for a balance sheet? Answer: Assets =
Liabilities + Equity
◉ What are the components of equity? Answer: 1. Preferred stock
2. common stock
3. paid-in capital
4. retained earnings
◉ What are retained earnings? Answer: This is the cumulative net
income that the company has earned
◉ How do you find a company's total number of assets off of the
balance sheet? Answer: Total assets = current assets + long-term
assets
◉ How do you find a company's total equity? Answer: Total equity =
Preferred stock + Common stock + PIC + Retained Earnings
◉ People borrow money because they expect Answer: Their
purchases to give them satisfaction that compensates them for the
interest payments charged on the loans
,◉ The higher the interest rate, the (larger/smaller) the future value
will be. Answer: larger
◉ When calculating the number of years needed to grow an
investment to a specific amount of money: Answer: The higher the
interest rate, the shorter the time period needed to achieve the
growth
◉ Which of the following will NOT increase a present value?
1. Increase the interest rate
2. Decrease the number of periods
3. Increase the future value
4. None of these answers are correct Answer: 1. Increase the interest
rate
◉ When computing the FV of an annuity, the higher the
compounding frequency, the (higher/lower) the FV will be Answer:
higher
◉ Everything being equal, you would rather be:
1. The receiver of an annuity due
2. The payer of an ordinary annuity
, 3. The receiver of an ordinary annuity
4. The payer of an annuity due Answer: 1. The receiver of an annuity
due
◉ The present value of annuity payments made far into the future is
worth Answer: very little today
◉ You are evaluating the balance sheet for Goodman's Bees
Corporation. From the balance sheet you find the following balances:
cash and marketable securities = $400,000, accounts receivable =
$1,200,000, inventory = $2,100,000, accrued wages and taxes =
$500,000, accounts payable = $800,000, and notes payable =
$600,000.
Calculate Goodman Bees' net working capital. Answer: Net working
capital = 1,800,000
Net working capital = current assets - current liabilities
◉ Casello Mowing & Landscaping's year-end 2015 balance sheet
lists current assets of $435,200, fixed assets of $550,800, current
liabilities of $416,600, and long-term debt of $314,500.
