C214 (Economics Finance) CONCEPTS
MULTIPLE CHOICE WITH T/F QUESTIONS AND
ANSWERS 100% VERIFIED WESTERN
GOVERNORS UNIVERSITY.
The stock price of a company increases and the market is deemed efficient. What
assumption can be made?
A. A new, patented, product was introduced to the market.
B. New machinery was purchased with a useful life of 20 years.
C. Management is optimizing its resources and operating efficiently.
D. Management hired new employees and invested in a training program.
a
Which statement is true about how the global market affects the U.S.
A. A bad options trade executed by a foreign subsidiary of a Wall Street bank will
affect layoffs overseas.
B. A Bad derivatives trade executed by a foreign subsidiary of a Wall Street bank
will affect layoffs overseas.
C. American investors and fund managers make decisions based on financial
reporting standards developed and financial statements audited overseas.
D. Foreign investors and fund managers make decisions based on financial
reporting standards developed and financial statements audited overseas.
d
What are secondary markets?
A. Markets where securities are traded subsequent to the initial offering.
,B. Markets were securities are issued for the first time.
C. Markets were securities are issued through a competitive sale.
D. Markets where securities are issued through a negotiated sale.
a
A special interest group in the U.S. has been lobbying intensely for protectionism
through increased tariffs and trade restrictions, with the argument that it will save
jobs in the industry they represent. What is the most likely result if they are
successful?
A. Employees and shareholders of the domestic industry that produce the
protective goods will be hurt and the nation will benefit.
B. The overall economy will benefit from trade restrictions and tariffs.
C. Removing the trade restrictions and tariffs will result in a net economic loss to
the overall U.S. economy.
D. Employees and shareholders of the domestic industry that produce the
protected goods will benefit and the nation will be hurt.
d
What is true about the content of an income statement?
A. It reports the assets, liabilities, and the equity at a point in time.
B. It reports the assets and expenses for a period of time.
C. It reports the expenses and liabilities at a point in time.
D. It reports the revenues and expenses for a period of time.
d
What is the basis used to compute a company's income tax expense?
A. Pretax accounting income.
,B. Taxable income.
C. Net operating income.
D. Taxes payable.
d
A company's trial balance shows $900 in long-term debt. On which financial
statement should this be shown?
A. The general ledger
B. The statement of cash flows
C. The income statement
D. The balance sheet
d
What do cash flows from financing activities generally relate to?
A. A firm's purchase and sale of long-term assets
B. A firm's non-cash transactions
C. A firms' debt and equity transactions
D. A firms sale of goods and services
c
What is true about the cash flow from the operating activities section of the
statement of cash flows?
A. Increases in current liability accounts represents an inflow of cash and should
be added to net income
B. Decreases in current liability accounts represent an outflow of cash and should
, be added to net income
C. Increases in current liability accounts represent an outflow of cash and should
be subtracted from net income
D. Decreases in current liability accounts represent an inflow of cash and should
be added to net income
a
An analyst is comparing the ratios of two firms and needs to address accounting
differences. What would be considered an accounting difference between two
firms?
A. The firms are in different industries
B. The firms have different auditors
C. The firms use different inventory methods
D. The firms have different fiscal years
c
Firms A and B are in the same industry. For the year 2013, Firm A has a gross
margin of .45 and Firm B has a gross margin of .36.
Which conclusion would an analyst draw when comparing Firm A to Firm B?
A. Firm A has a more efficient production process
B. Firm A has higher depreciation expense
C. Firm A has lower depreciation expense
D. Firm A has less efficient production process
a
What is an example of an estimate used in recording transactions?
A. Deciding the salvage value of fixed asset when calculating depreciation
MULTIPLE CHOICE WITH T/F QUESTIONS AND
ANSWERS 100% VERIFIED WESTERN
GOVERNORS UNIVERSITY.
The stock price of a company increases and the market is deemed efficient. What
assumption can be made?
A. A new, patented, product was introduced to the market.
B. New machinery was purchased with a useful life of 20 years.
C. Management is optimizing its resources and operating efficiently.
D. Management hired new employees and invested in a training program.
a
Which statement is true about how the global market affects the U.S.
A. A bad options trade executed by a foreign subsidiary of a Wall Street bank will
affect layoffs overseas.
B. A Bad derivatives trade executed by a foreign subsidiary of a Wall Street bank
will affect layoffs overseas.
C. American investors and fund managers make decisions based on financial
reporting standards developed and financial statements audited overseas.
D. Foreign investors and fund managers make decisions based on financial
reporting standards developed and financial statements audited overseas.
d
What are secondary markets?
A. Markets where securities are traded subsequent to the initial offering.
,B. Markets were securities are issued for the first time.
C. Markets were securities are issued through a competitive sale.
D. Markets where securities are issued through a negotiated sale.
a
A special interest group in the U.S. has been lobbying intensely for protectionism
through increased tariffs and trade restrictions, with the argument that it will save
jobs in the industry they represent. What is the most likely result if they are
successful?
A. Employees and shareholders of the domestic industry that produce the
protective goods will be hurt and the nation will benefit.
B. The overall economy will benefit from trade restrictions and tariffs.
C. Removing the trade restrictions and tariffs will result in a net economic loss to
the overall U.S. economy.
D. Employees and shareholders of the domestic industry that produce the
protected goods will benefit and the nation will be hurt.
d
What is true about the content of an income statement?
A. It reports the assets, liabilities, and the equity at a point in time.
B. It reports the assets and expenses for a period of time.
C. It reports the expenses and liabilities at a point in time.
D. It reports the revenues and expenses for a period of time.
d
What is the basis used to compute a company's income tax expense?
A. Pretax accounting income.
,B. Taxable income.
C. Net operating income.
D. Taxes payable.
d
A company's trial balance shows $900 in long-term debt. On which financial
statement should this be shown?
A. The general ledger
B. The statement of cash flows
C. The income statement
D. The balance sheet
d
What do cash flows from financing activities generally relate to?
A. A firm's purchase and sale of long-term assets
B. A firm's non-cash transactions
C. A firms' debt and equity transactions
D. A firms sale of goods and services
c
What is true about the cash flow from the operating activities section of the
statement of cash flows?
A. Increases in current liability accounts represents an inflow of cash and should
be added to net income
B. Decreases in current liability accounts represent an outflow of cash and should
, be added to net income
C. Increases in current liability accounts represent an outflow of cash and should
be subtracted from net income
D. Decreases in current liability accounts represent an inflow of cash and should
be added to net income
a
An analyst is comparing the ratios of two firms and needs to address accounting
differences. What would be considered an accounting difference between two
firms?
A. The firms are in different industries
B. The firms have different auditors
C. The firms use different inventory methods
D. The firms have different fiscal years
c
Firms A and B are in the same industry. For the year 2013, Firm A has a gross
margin of .45 and Firm B has a gross margin of .36.
Which conclusion would an analyst draw when comparing Firm A to Firm B?
A. Firm A has a more efficient production process
B. Firm A has higher depreciation expense
C. Firm A has lower depreciation expense
D. Firm A has less efficient production process
a
What is an example of an estimate used in recording transactions?
A. Deciding the salvage value of fixed asset when calculating depreciation
