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C214 OA Financial Management Concepts Version Exam-with verified
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answers-2022 gradedA+
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Trading on the NYSE is executed without a specialist (i.e. a market maker). (T/F) -Answer False
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Stocks and bonds are two types of financial instruments (T/F) - Answer True
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The matching principle in accrual accounting requires that:
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a. Revenues be recognized when the earnings process is complete and matchesexpenses to revenues
recognized.
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b. Expenses are matched to the year in which they are incurredc. Revenues are
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matched to the year in which they are booked
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d. Revenues should be large enough to match expenses - Answer a
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A high-quality customer just purchased $500,000 worth of product from your company. The contract calls
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for immediate delivery of the product with a cash payment of $300,000 today and $200,000 to be paid 60
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days. The expense associated with the product is $300,000, of which $100,000 has not been paid toyour
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supplier. Under accrual based accounting system, you will most likely reporta. revenues of $300,000 and
expenses of $300,000.
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b. revenues of $300,000 and expenses of $200,000.c. revenues of
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$500,000 and expenses of $300,000.
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d. revenues of $500,000 and expenses of $200,000. - Answer c
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A firm reported retained earnings of $300 in 12/31/20x2. For 12/31/20x3, the firm reports retained earnings of
$400 and pays dividends of $25. What was net incomein 20x3
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a. 300
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b. 400
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c. 125
d. 100 - Answer c
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A basic equation for the balance sheet is:a. Equity =
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Assets - Liabilities
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b. Liabilities = Equity + Assetsc. Assets =
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Liabilities - Equity
d. Assets = Equity - Liabilities - Answer a
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Why is the Balance Sheet known as a permanent statement?a. Because the
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statement is sent to the SEC.
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b. Because the other statements are reset at the end of the fiscal yearc. Because it is printed
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out and archived
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d. Because it persists in the minds of the shareholders. - Answer b
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How do you calculate the change in Retained Earnings?a. Ending Retained
Earnings - Change in Cash
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in Cash - Dividends
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d. Net Income - Dividends - Answer d
b. EBIT divided by Total Assets + Dividendsc. EBIT - Change
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Which of the following is generally true?
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a. Gross Profit and Operating Income are the same
b. Cost of Goods Sold + Operating Expenses = Net Incomec. Operating Income
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and EBIT are the same
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d. EBIT + Income Taxes = Net income - Answer c
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Which components are part of total assets?
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a. Cash, Accounts Receivable, Short Term Debt
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b. Cash Accounts Receivable, Inventory, Long Term Assetsc. Accounts Payable,
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Long Term Assets, Long Term Debt d. Accounts Payable, Net Income, Equity -
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Answer b
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Which components are part of current assets?
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a. Cash, Accounts Receivable, Property Plant & Equipmentb. Accounts
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Receivable, Accounts Payable, Inventory
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c. Long Term Debt, Property Plant & Equipment, Common Stock
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d. Inventory, Cash, Accounts Receivable, Short Term Investments - Answer d
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Which components are part of Total Liabilities?
a. Accounts Payable, Accounts Receivable, Short Term Debtb. Long Term Debt,
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Common Stock, Retained Earnings
c. Bonds, Accounts Payable, Mortgage
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d. Common Stock, Long Term Debt, Short Term Investments - Answer c
Intel reported the following for 2014:
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Net Income 100,000 Depreciation
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20,000 Change in A/R 10,000
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What is the cash flow from operating activities (CF0)?a. 100,000
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b. 110,000
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c. 120,000
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d. (130,000) - Answer b
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Intel reported the following for 2014:
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Gross Equipment (1/1/14) 50,000 Gross
Equipment (12/31/14) 65,000Net income 100,000
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Depreciation 20,000
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What is the cash flow from investing activities for 2014?a. 100,000
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b. 80,000
c. (15,000)
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d. 15,000 - Answer c
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What is the Cash Flow from Operations given the following information?Net Income 450,000
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Change in Accounts Receivable 120,000
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C214 OA Financial Management Concepts Version Exam-with verified
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answers-2022 gradedA+
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Trading on the NYSE is executed without a specialist (i.e. a market maker). (T/F) -Answer False
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Stocks and bonds are two types of financial instruments (T/F) - Answer True
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The matching principle in accrual accounting requires that:
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a. Revenues be recognized when the earnings process is complete and matchesexpenses to revenues
recognized.
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b. Expenses are matched to the year in which they are incurredc. Revenues are
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matched to the year in which they are booked
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d. Revenues should be large enough to match expenses - Answer a
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A high-quality customer just purchased $500,000 worth of product from your company. The contract calls
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for immediate delivery of the product with a cash payment of $300,000 today and $200,000 to be paid 60
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days. The expense associated with the product is $300,000, of which $100,000 has not been paid toyour
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supplier. Under accrual based accounting system, you will most likely reporta. revenues of $300,000 and
expenses of $300,000.
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b. revenues of $300,000 and expenses of $200,000.c. revenues of
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$500,000 and expenses of $300,000.
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d. revenues of $500,000 and expenses of $200,000. - Answer c
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A firm reported retained earnings of $300 in 12/31/20x2. For 12/31/20x3, the firm reports retained earnings of
$400 and pays dividends of $25. What was net incomein 20x3
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a. 300
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b. 400
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c. 125
d. 100 - Answer c
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A basic equation for the balance sheet is:a. Equity =
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Assets - Liabilities
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b. Liabilities = Equity + Assetsc. Assets =
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Liabilities - Equity
d. Assets = Equity - Liabilities - Answer a
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Why is the Balance Sheet known as a permanent statement?a. Because the
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statement is sent to the SEC.
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b. Because the other statements are reset at the end of the fiscal yearc. Because it is printed
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out and archived
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d. Because it persists in the minds of the shareholders. - Answer b
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How do you calculate the change in Retained Earnings?a. Ending Retained
Earnings - Change in Cash
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in Cash - Dividends
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d. Net Income - Dividends - Answer d
b. EBIT divided by Total Assets + Dividendsc. EBIT - Change
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Which of the following is generally true?
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a. Gross Profit and Operating Income are the same
b. Cost of Goods Sold + Operating Expenses = Net Incomec. Operating Income
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and EBIT are the same
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d. EBIT + Income Taxes = Net income - Answer c
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Which components are part of total assets?
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a. Cash, Accounts Receivable, Short Term Debt
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b. Cash Accounts Receivable, Inventory, Long Term Assetsc. Accounts Payable,
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Long Term Assets, Long Term Debt d. Accounts Payable, Net Income, Equity -
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Answer b
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Which components are part of current assets?
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a. Cash, Accounts Receivable, Property Plant & Equipmentb. Accounts
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Receivable, Accounts Payable, Inventory
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c. Long Term Debt, Property Plant & Equipment, Common Stock
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d. Inventory, Cash, Accounts Receivable, Short Term Investments - Answer d
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Which components are part of Total Liabilities?
a. Accounts Payable, Accounts Receivable, Short Term Debtb. Long Term Debt,
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Common Stock, Retained Earnings
c. Bonds, Accounts Payable, Mortgage
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d. Common Stock, Long Term Debt, Short Term Investments - Answer c
Intel reported the following for 2014:
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Net Income 100,000 Depreciation
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20,000 Change in A/R 10,000
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What is the cash flow from operating activities (CF0)?a. 100,000
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b. 110,000
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c. 120,000
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d. (130,000) - Answer b
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Intel reported the following for 2014:
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Gross Equipment (1/1/14) 50,000 Gross
Equipment (12/31/14) 65,000Net income 100,000
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Depreciation 20,000
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What is the cash flow from investing activities for 2014?a. 100,000
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b. 80,000
c. (15,000)
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d. 15,000 - Answer c
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What is the Cash Flow from Operations given the following information?Net Income 450,000
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Change in Accounts Receivable 120,000
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