ACCOUTING 333 CHAPTER 2 QUIZ (ACCOUTING333CHAPTER2QUIZ)

ACCOUTING 333 CHAPTER 2 QUIZ A current asset is best defined as: o the market value of all assets currently owned by the firm. o an asset the firm expects to purchase within the next year. o the amount of cash on hand the firm currently shows on its balance sheet. o cash and other assets owned by the firm that will convert to cash within the next year. o the value of fixed assets the firm expects to sell within the next year 2. Given the tax rates as shown, what is the average tax rate for a firm with taxable income of $126,500? o 21.38% o 23.88% o 25.76% o 34.64% o 39.00% Tax = .15($50,000) + .25($25,000) + .34($25,000) + .39($126,500 - 100,000) = $32,585 Average tax rate = $32,585/$126,500 = .2576, or 25.76% 3. A(n) ____ asset is one which can be quickly converted into cash without significant loss in value. o tangible o fixed o intangible o liquid o long-term 4. _____ refers to the changes in net capital assets. • Cash flow from assets • Net working capital • Cash flow from investing • Operating cash flow • Cash flow to creditors 5. Which of the following are included in current liabilities? I. Debt payable to a mortgage company in nine months II. Note payable to a supplier in eighteen months III. Accounts payable to suppliers IV. Loan payable to a bank in fourteen months o I and III only o II and III only o III and IV only o II, III, and IV only o I, II, and III only 6. Which one of the following statements concerning liquidity is correct? o Fixed assets are more liquid than current assets. o Balance sheet accounts are listed in order of decreasing liquidity. o Liquid assets tend to be