CFIN FINANCE NEW EXAM 100% SOLVED
CORRECTLY A+ GRADED
CFIN Finance Ch 2
Which financial statement reports the firm's assets, liabilities, and equity at a specific
point in time?
A. Balance Sheet
B. Income Statement
C. Statement of Retained Earnings
D. Statement of Cash Flows - ANSWER A. Balance Sheet
Which financial statement presents the total revenues that a firm generates and the total
expenses the firm incurs to produce those revenues over a given period of time—usually
one year?
A. Balance Sheet
B. Income Statement
C. Statement of Retained Earnings
D. Statement of Cash Flows - ANSWER B. Income Statement
Which financial statement reports the amounts of cash that the firm generated and
distributed during a particular time period?
A. Balance Sheet
B. Income Statement
C. Statement of Retained Earnings
D. Statement of Cash Flows - ANSWER D. Statement of Cash Flows
Which of the following financial statements reconciles net income earned during a given
,period and any cash dividends paid within that period using the change in retained
earnings between the beginning and end of the period?
A. Balance Sheet
B. Income Statement
C. Statement of Retained Earnings
D. Statement of Cash Flows - ANSWER C. Statement of Retained Earnings
On which of the four major financial statements would you find the common stock and
paid-in surplus?
A. Balance Sheet
B. Income Statement
C. Statement of Cash Flows
D. Statement of Retained Earnings - ANSWER A. Balance Sheet
On which of the four major financial statements would you find the increase in
inventory?
A. Balance Sheet
B. Income Statement
C. Statement of Cash Flows
D. Statement of Retained Earnings - ANSWER C. Statement of Cash Flows
On which of the four major financial statements would you find net plant and equipment?
A. Balance Sheet
B. Income Statement
C. Statement of Cash Flows
D. Statement of Retained Earnings - ANSWER A. Balance Sheet
For which of the following would one expect the book value of the asset to differ widely
from its market value?
,A. Cash
B. Accounts receivable
C. Inventory
D. Fixed assets - ANSWER D. Fixed assets
Common stockholders' equity divided by number of shares of common stock
outstanding is the formula for calculating
A. Earnings per share (EPS)
B. Dividends per share (DPS)
C. Book value per share (BVPS)
D. Market value per share (MVPS) - ANSWER C. Book value per share (BVPS)
This is the amount of additional taxes a firm must pay out for every additional dollar of
taxable income it earns.
A. Average tax rate
B. Marginal tax rate
C. Progressive tax system
D. Earnings before tax - ANSWER B. Marginal tax rate
An equity-financed firm will
A. pay more in income taxes than a debt-financed firm.
B. pay less in income taxes than a debt-financed firm.
C. pay the same in income taxes as a debt-finance firm.
D. not pay any income taxes. - ANSWER A. pay more in income taxes than a
debt-financed firm.
This is cash flow available for payments to stockholders and debt holders of a firm after
the firm has made investments in assets necessary to sustain the ongoing operations of
the firm.
, A. Net income available to common stockholders
B. Cash flow from operations
C. Net cash flow
D. Free cash flow - ANSWER D. Free cash flow
Which of the following activities result in an increase in a firm's cash?
A. Decrease fixed assets
B. Decrease accounts payable
C. Pay dividends
D. Repurchase of common stock - ANSWER A. Decrease fixed assets
These are cash inflows and outflows associated with buying and selling of fixed or other
long-term assets.
A. Cash flows from operations
B. Cash flows from investing activities
C. Cash flows from financing activities
D. Net change in cash and cash equivalents - ANSWER B. Cash flows from investing
activities
If a company reports a large amount of net income on its income statement during a
year, the firm will have
A. positive cash flow.
B. negative cash flow.
C. zero cash flow.
D. Any of these scenarios are possible. - ANSWER D. Any of these scenarios are
possible.
Free cash flow is defined as
A. Cash flows available for payments to stockholders of a firm after the firm has made
CORRECTLY A+ GRADED
CFIN Finance Ch 2
Which financial statement reports the firm's assets, liabilities, and equity at a specific
point in time?
A. Balance Sheet
B. Income Statement
C. Statement of Retained Earnings
D. Statement of Cash Flows - ANSWER A. Balance Sheet
Which financial statement presents the total revenues that a firm generates and the total
expenses the firm incurs to produce those revenues over a given period of time—usually
one year?
A. Balance Sheet
B. Income Statement
C. Statement of Retained Earnings
D. Statement of Cash Flows - ANSWER B. Income Statement
Which financial statement reports the amounts of cash that the firm generated and
distributed during a particular time period?
A. Balance Sheet
B. Income Statement
C. Statement of Retained Earnings
D. Statement of Cash Flows - ANSWER D. Statement of Cash Flows
Which of the following financial statements reconciles net income earned during a given
,period and any cash dividends paid within that period using the change in retained
earnings between the beginning and end of the period?
A. Balance Sheet
B. Income Statement
C. Statement of Retained Earnings
D. Statement of Cash Flows - ANSWER C. Statement of Retained Earnings
On which of the four major financial statements would you find the common stock and
paid-in surplus?
A. Balance Sheet
B. Income Statement
C. Statement of Cash Flows
D. Statement of Retained Earnings - ANSWER A. Balance Sheet
On which of the four major financial statements would you find the increase in
inventory?
A. Balance Sheet
B. Income Statement
C. Statement of Cash Flows
D. Statement of Retained Earnings - ANSWER C. Statement of Cash Flows
On which of the four major financial statements would you find net plant and equipment?
A. Balance Sheet
B. Income Statement
C. Statement of Cash Flows
D. Statement of Retained Earnings - ANSWER A. Balance Sheet
For which of the following would one expect the book value of the asset to differ widely
from its market value?
,A. Cash
B. Accounts receivable
C. Inventory
D. Fixed assets - ANSWER D. Fixed assets
Common stockholders' equity divided by number of shares of common stock
outstanding is the formula for calculating
A. Earnings per share (EPS)
B. Dividends per share (DPS)
C. Book value per share (BVPS)
D. Market value per share (MVPS) - ANSWER C. Book value per share (BVPS)
This is the amount of additional taxes a firm must pay out for every additional dollar of
taxable income it earns.
A. Average tax rate
B. Marginal tax rate
C. Progressive tax system
D. Earnings before tax - ANSWER B. Marginal tax rate
An equity-financed firm will
A. pay more in income taxes than a debt-financed firm.
B. pay less in income taxes than a debt-financed firm.
C. pay the same in income taxes as a debt-finance firm.
D. not pay any income taxes. - ANSWER A. pay more in income taxes than a
debt-financed firm.
This is cash flow available for payments to stockholders and debt holders of a firm after
the firm has made investments in assets necessary to sustain the ongoing operations of
the firm.
, A. Net income available to common stockholders
B. Cash flow from operations
C. Net cash flow
D. Free cash flow - ANSWER D. Free cash flow
Which of the following activities result in an increase in a firm's cash?
A. Decrease fixed assets
B. Decrease accounts payable
C. Pay dividends
D. Repurchase of common stock - ANSWER A. Decrease fixed assets
These are cash inflows and outflows associated with buying and selling of fixed or other
long-term assets.
A. Cash flows from operations
B. Cash flows from investing activities
C. Cash flows from financing activities
D. Net change in cash and cash equivalents - ANSWER B. Cash flows from investing
activities
If a company reports a large amount of net income on its income statement during a
year, the firm will have
A. positive cash flow.
B. negative cash flow.
C. zero cash flow.
D. Any of these scenarios are possible. - ANSWER D. Any of these scenarios are
possible.
Free cash flow is defined as
A. Cash flows available for payments to stockholders of a firm after the firm has made
