BFIN FINAL (MIDTERM QUESTIONS)
Which one of the following is the financial statement which shows the accounting value
of a firm's equity as of a particular date? (B-41; C-11)
a) Income statement
b) Creditor statement
c) Balance sheet
d) Statement of cash flows
e) Dividend statement - Answers -Balance sheet
Net working capital is defined as: (B-42; C-12)
a) Total liabilities minus shareholders' equity
b) Current liabilities minus shareholders' equity
c) Fixed assets minus long-term liabilities
d) Total assets minus total liabilities
e) Current assets minus current liabilities - Answers -Current assets minus current
liabilities
Which one of these set forth the common set of standards and procedures by which
audited financial statements are prepared? (B-
43; C-13)
a) The Matching Principle
b) The Cash Flow Identity
c) Generally Accepted Accounting Principles
d) Financial Accounting Reporting Principles
e) Standard Accounting Value Guidelines - Answers -Generally accepted accounting
principles
Which one of the following accounts is the most liquid? (B-44; C-14)
a) Inventory
b) Building
c) Accounts Receivable
d) Equipment
e) Land - Answers -Accounts Receivable
The process of planning and managing a firm's long-term investment is called: (B-45; C-
15)
a) Capital Budgeting
b) Working Capital
c) Profit Maximization
d) Capital Structure
e) Investing - Answers -Capital budgeting
Which of the following are current assets? (B-2; C-22)
I. Cash
II. Trademark
, III. Accounts Receivable
IV. Notes Payable
a) II and III only
b) I and III only
c) I, II, and IV only
d) I, III, and IV only
e) II, III, and IV only - Answers -I and III only
Which of the following are included in current liabilities? (B-3; C-23)
I. Note payable to a supplier in 13 months
II. Amount due from a customer last week
III. Account payable to a supplier that is due next week
IV. Loan payable to the bank in 10 months
a) I and III only
b) III and IV only
c) I, II, and III only
d) I, III, and IV only
e) I, II, III, and IV - Answers -III and IV only
Which one of the following statem ents concerning net working capital is correct? (B-4;
C-24)
a) Net working capital increases when inventory is purchased with cash
b) Net working capital excludes inventory
c) Total assets must increase if net working capital increases
d) Net working capital may be a negative value
e) Net working capital is the amount of cash a firm currently has available for spending -
Answers -Net working capital may be a negative value
A business partner whose potential financial loss in the partnership will not exceed his
or her investm ent in that partnership is called: (B-5; C25)
a) General partner
b) Sole proprietor
c) Limited partner
d) Corporate shareholder
e) Zero partner - Answers -Limited partner
Which of the following accounts are always included in working capital m anagement?
(B-6; C-26)
I. Accounts Payable
II. Accounts Receivable
III. Fixed Assets
IV. Inventory
a) I and II only
b) I and III only
Which one of the following is the financial statement which shows the accounting value
of a firm's equity as of a particular date? (B-41; C-11)
a) Income statement
b) Creditor statement
c) Balance sheet
d) Statement of cash flows
e) Dividend statement - Answers -Balance sheet
Net working capital is defined as: (B-42; C-12)
a) Total liabilities minus shareholders' equity
b) Current liabilities minus shareholders' equity
c) Fixed assets minus long-term liabilities
d) Total assets minus total liabilities
e) Current assets minus current liabilities - Answers -Current assets minus current
liabilities
Which one of these set forth the common set of standards and procedures by which
audited financial statements are prepared? (B-
43; C-13)
a) The Matching Principle
b) The Cash Flow Identity
c) Generally Accepted Accounting Principles
d) Financial Accounting Reporting Principles
e) Standard Accounting Value Guidelines - Answers -Generally accepted accounting
principles
Which one of the following accounts is the most liquid? (B-44; C-14)
a) Inventory
b) Building
c) Accounts Receivable
d) Equipment
e) Land - Answers -Accounts Receivable
The process of planning and managing a firm's long-term investment is called: (B-45; C-
15)
a) Capital Budgeting
b) Working Capital
c) Profit Maximization
d) Capital Structure
e) Investing - Answers -Capital budgeting
Which of the following are current assets? (B-2; C-22)
I. Cash
II. Trademark
, III. Accounts Receivable
IV. Notes Payable
a) II and III only
b) I and III only
c) I, II, and IV only
d) I, III, and IV only
e) II, III, and IV only - Answers -I and III only
Which of the following are included in current liabilities? (B-3; C-23)
I. Note payable to a supplier in 13 months
II. Amount due from a customer last week
III. Account payable to a supplier that is due next week
IV. Loan payable to the bank in 10 months
a) I and III only
b) III and IV only
c) I, II, and III only
d) I, III, and IV only
e) I, II, III, and IV - Answers -III and IV only
Which one of the following statem ents concerning net working capital is correct? (B-4;
C-24)
a) Net working capital increases when inventory is purchased with cash
b) Net working capital excludes inventory
c) Total assets must increase if net working capital increases
d) Net working capital may be a negative value
e) Net working capital is the amount of cash a firm currently has available for spending -
Answers -Net working capital may be a negative value
A business partner whose potential financial loss in the partnership will not exceed his
or her investm ent in that partnership is called: (B-5; C25)
a) General partner
b) Sole proprietor
c) Limited partner
d) Corporate shareholder
e) Zero partner - Answers -Limited partner
Which of the following accounts are always included in working capital m anagement?
(B-6; C-26)
I. Accounts Payable
II. Accounts Receivable
III. Fixed Assets
IV. Inventory
a) I and II only
b) I and III only
