FIN 3154 Corporate Finance Exam-1
UPDATED ACTUAL Exam Questions and
CORRECT Answers
The income statement measures performance ___________ - CORRECT ANSWER - over
a specific period of time
The accounting definition of income is (formula) - CORRECT ANSWER - Revenue -
Expenss = Income
Everything on the income statement is what kind of variable? - CORRECT ANSWER -
Flow
what is included in the operating section of the income statement? - CORRECT
ANSWER - -operating revenues
-costs of goods sold
-selling, general, and admin expenses
-depreciation
---operating income
Adjusting for normal revenues/expenses that are not regarded as principal operations includes? -
CORRECT ANSWER - other income
--Earnings before interest and taxes
Cost of debt financings is what? - CORRECT ANSWER - Interest Expense
Tax expense vs taxes actually paid - CORRECT ANSWER - -taxable income
-Taxes
--currently due
, --chg in deferred
Disposition of income is? - CORRECT ANSWER - Dividends
Retained earnings
is net income the same as net cash flow? - CORRECT ANSWER - GAAP - matching
principle of GAAP dictates that revenues be match with expenses.
income is reported when it is earned, even though no cash flow may have occured
Cash inflows are a - CORRECT ANSWER - source of cash
Cash outflows are a - CORRECT ANSWER - use of cash
Accurals definition? - CORRECT ANSWER - accounting recognizes revenue and
expenses when a transaction occurs, not when a cash flow occurs.
Credit sale - CORRECT ANSWER - recognize revenue today, receive cash at a later date
revenue and receivables at recognition date
receivables and cash at payment date
define prepayments? - CORRECT ANSWER - accounting recognizes revenue and
expenses when a transaction occurs, not when a cash flows occurs
prepaid expense? - CORRECT ANSWER - pay cash today, recognize expenses at a later
date.
UPDATED ACTUAL Exam Questions and
CORRECT Answers
The income statement measures performance ___________ - CORRECT ANSWER - over
a specific period of time
The accounting definition of income is (formula) - CORRECT ANSWER - Revenue -
Expenss = Income
Everything on the income statement is what kind of variable? - CORRECT ANSWER -
Flow
what is included in the operating section of the income statement? - CORRECT
ANSWER - -operating revenues
-costs of goods sold
-selling, general, and admin expenses
-depreciation
---operating income
Adjusting for normal revenues/expenses that are not regarded as principal operations includes? -
CORRECT ANSWER - other income
--Earnings before interest and taxes
Cost of debt financings is what? - CORRECT ANSWER - Interest Expense
Tax expense vs taxes actually paid - CORRECT ANSWER - -taxable income
-Taxes
--currently due
, --chg in deferred
Disposition of income is? - CORRECT ANSWER - Dividends
Retained earnings
is net income the same as net cash flow? - CORRECT ANSWER - GAAP - matching
principle of GAAP dictates that revenues be match with expenses.
income is reported when it is earned, even though no cash flow may have occured
Cash inflows are a - CORRECT ANSWER - source of cash
Cash outflows are a - CORRECT ANSWER - use of cash
Accurals definition? - CORRECT ANSWER - accounting recognizes revenue and
expenses when a transaction occurs, not when a cash flow occurs.
Credit sale - CORRECT ANSWER - recognize revenue today, receive cash at a later date
revenue and receivables at recognition date
receivables and cash at payment date
define prepayments? - CORRECT ANSWER - accounting recognizes revenue and
expenses when a transaction occurs, not when a cash flows occurs
prepaid expense? - CORRECT ANSWER - pay cash today, recognize expenses at a later
date.
