Business Finance: Final
Exam Study Guide (Ch1-
Ch8) Questions and
Answers Updated 2026 -
2027
(Ch1)B
WhichBoneBofBtheBfollowingBisBtheBfinancialBstatementBthatBshowsBaBfinancialBsnapsh
ot,BtakenBatBaBpointBinBtime,BofBallBtheBassetsBtheBcompanyBownsBandBallBtheBclai
msBagainstBthoseBassets?B-BAnswerBBalanceBSheet
(Ch1)B
ABbalanceBsheetBreportsBtheBvalueBofBaBfirm'sBassets,Bliabilities,BandBequityB-
BAnswerBAtBanyBpointBinBtime
(Ch1)BABcompanyBsellsBusedBequipmentBwithBaBbookBvalueBofB$100,000BforB$250,00
0Bcash.BHowBwouldBthisBtransactionBaffectBtheBcompany'sBbalanceBsheet?B-
BAnswerBCashBrisesB$250,000;BnetBplantBandBequipmentBfallsB$100,000;BequityBrisesB
$150,000.
(Ch1)B
ABcompanyBpurchasesBaBnewB$10BmillionBbuildingBfinancedBhalfBwithBcashBandBhalfB
withBaBbankBloan.BHowBwouldBthisBtransactionBaffectBtheBcompany'sBbalanceBsheet?B
-
BAnswerBNetBplantBandBequipmentBrisesB$10Bmillion;BcashBfallsB$5Bmillion;BbankBde
btBrisesB$5Bmillion.
(Ch1)BWhichBoneBofBtheBfollowingBisBtheBfinancialBstatementBthatBsummarizesBaBfirm
'sBrevenueBandBexpensesBoverBaBperiodBofBtime?B-BAnswerBincomeBstatement
, (Ch1)B
TheBsourcesBandBusesBofBcashBoverBaBstatedBperiodBofBtimeBareBreflectedBinBtheB-
BAnswerBCashBFlowBStatement
(Ch1)B
WhichBoneBofBtheBfollowingBisBaBsourceBofBcash?B-
BAnswerBincreaseBinBaccountsBpayable
(Ch1)B
WhichBoneBofBtheBfollowingBisBaBuseBofBcash?B-BAnswerBIncreaseBInBInventory
(Ch1)WhichBoneBofBtheBfollowingBisBaBsourceBofBcash?B-
BAnswerBdecreaseBinBaccountsBrecievable
(Ch1)B
WhichBofBtheBfollowingBwouldBNOTBbeBconsideredBaBuseBofBcash?B-
BAnswerBDepreciation
(Ch1)BTheBbookBvalueBofBaBfirmBisB-BAnswerBbasedBonBhistoricalBcost.
(Ch1)BDepreciationBexpenseB-BAnswerBreducesBbothBtaxesBandBnetBincome.
Correct
(Ch1)BSupposeBanBacquiringBfirmBpaysB$100BmillionBforBaBtargetBfirm,BandBtheBtarget
'sBassetsBhaveBaBbookBvalueBofB$70BmillionBandBanBestimatedBreplacementBvalueBof
B$80Bmillion.BWhatBamountBwouldBbeBallocatedBtoBtheBacquiringBfirm'sBgoodwillBacc
ount?B-BAnswerB$20Million
Exam Study Guide (Ch1-
Ch8) Questions and
Answers Updated 2026 -
2027
(Ch1)B
WhichBoneBofBtheBfollowingBisBtheBfinancialBstatementBthatBshowsBaBfinancialBsnapsh
ot,BtakenBatBaBpointBinBtime,BofBallBtheBassetsBtheBcompanyBownsBandBallBtheBclai
msBagainstBthoseBassets?B-BAnswerBBalanceBSheet
(Ch1)B
ABbalanceBsheetBreportsBtheBvalueBofBaBfirm'sBassets,Bliabilities,BandBequityB-
BAnswerBAtBanyBpointBinBtime
(Ch1)BABcompanyBsellsBusedBequipmentBwithBaBbookBvalueBofB$100,000BforB$250,00
0Bcash.BHowBwouldBthisBtransactionBaffectBtheBcompany'sBbalanceBsheet?B-
BAnswerBCashBrisesB$250,000;BnetBplantBandBequipmentBfallsB$100,000;BequityBrisesB
$150,000.
(Ch1)B
ABcompanyBpurchasesBaBnewB$10BmillionBbuildingBfinancedBhalfBwithBcashBandBhalfB
withBaBbankBloan.BHowBwouldBthisBtransactionBaffectBtheBcompany'sBbalanceBsheet?B
-
BAnswerBNetBplantBandBequipmentBrisesB$10Bmillion;BcashBfallsB$5Bmillion;BbankBde
btBrisesB$5Bmillion.
(Ch1)BWhichBoneBofBtheBfollowingBisBtheBfinancialBstatementBthatBsummarizesBaBfirm
'sBrevenueBandBexpensesBoverBaBperiodBofBtime?B-BAnswerBincomeBstatement
, (Ch1)B
TheBsourcesBandBusesBofBcashBoverBaBstatedBperiodBofBtimeBareBreflectedBinBtheB-
BAnswerBCashBFlowBStatement
(Ch1)B
WhichBoneBofBtheBfollowingBisBaBsourceBofBcash?B-
BAnswerBincreaseBinBaccountsBpayable
(Ch1)B
WhichBoneBofBtheBfollowingBisBaBuseBofBcash?B-BAnswerBIncreaseBInBInventory
(Ch1)WhichBoneBofBtheBfollowingBisBaBsourceBofBcash?B-
BAnswerBdecreaseBinBaccountsBrecievable
(Ch1)B
WhichBofBtheBfollowingBwouldBNOTBbeBconsideredBaBuseBofBcash?B-
BAnswerBDepreciation
(Ch1)BTheBbookBvalueBofBaBfirmBisB-BAnswerBbasedBonBhistoricalBcost.
(Ch1)BDepreciationBexpenseB-BAnswerBreducesBbothBtaxesBandBnetBincome.
Correct
(Ch1)BSupposeBanBacquiringBfirmBpaysB$100BmillionBforBaBtargetBfirm,BandBtheBtarget
'sBassetsBhaveBaBbookBvalueBofB$70BmillionBandBanBestimatedBreplacementBvalueBof
B$80Bmillion.BWhatBamountBwouldBbeBallocatedBtoBtheBacquiringBfirm'sBgoodwillBacc
ount?B-BAnswerB$20Million