Test Bank for Analysis For Financial Management 13th Edition Robert Hig
m m m m m m m m m mm
gins, Jennifer Koski, Todd Mitton
m m m m
Student name:
m
TRUE/FALSE m-mWritem'T'mif mthemstatementmismtruemandm'F'mif mthemstatementmismfalse.
1) Current mliabilitiesmaremdefined masmliabilitiesmwithmammaturitymof mlessmthanmone myear.
⊚ true
⊚ false
2) A mdeclineminmthemNet mProperty,mPlant,mand mEquipment maccount mbetweenmyear-
end m2020mand myear-end m2021mismamclearmindicationmthat mfixed massetsmweremsold mduringm2021.
⊚ true
⊚ false
3) Whenmreportingmfinancialmperformancemformtaxmpurposes,mU.S.mcompanies mprefermtomu
semaccelerated mdepreciationmmethodsmovermthemstraight-linemmethod.
⊚ true
⊚ false
4) AccountingmrulesmrequiremU.S.mcompaniesmtomdepreciatemresearchmand mdevelopment m(R&
D)mexpendituresmusingmthemstraight-linemmethod.
⊚ true
⊚ false
5) Youmcanmconstruct mamsourcesmand musesmstatement mform2021mif myoumhavemamcompany’smye
ar-mend mbalancemsheetsmform2021mand m2022.
⊚ true
⊚ false
6) A mreductionminmlong-termmdebt mismamusemof mcash.
⊚ true
⊚ false
,7) Themaccrualmprinciplemrequiresmthat mrevenue mnot mbemrecognized muntilmpayment mfrommamsale
mismreceived.
⊚ true
⊚ false
8) Anmincreaseminmcashmand mcashmequivalentsmshould mappearmasmamusemof mcashmonmthemsour
cesmand musesmstatement.
⊚ true
⊚ false
9) A mcashmflow mstatement mplacesmeachmsourcemormusemof mcashmintomonemof mthreembro
ad mcategories:moperatingmactivities,minvestingmactivities,mormfinancingm activities.
⊚ true
⊚ false
10) Themcost mof mequitymismusuallymreported monmthemincomemstatement mright mbelow minter
est mexpense.
⊚ true
⊚ false
11) ThemUnited mStatesmwasmonemof mthemfirst mcountriesmtomadopt mInternationalmFinanci
almReportingmStandards.
⊚ true
⊚ false
MULTIPLEmCHOICEm-
mChoosemthemonemalternativemthatmbestmcompletesmthemstatementmormanswersmthemquestion.
12) Whichmof mthemfollowingmstatementsmconcerningmamfirm’smcashmflowsmand mprofitsmismfalse?
, A) Managersmmust mbemat mleast masmconcerned mwithmcashmflowsmasmwithmprofits.
B) Amcompanymthat msellsmmerchandisemat mamprofit mcanmbemassured mof mgeneratingmcashmso
onmenoughmtomreplenishmcashmflowsmrequired mformcontinued mproduction.
C) Themcashmflowsmgenerated minmamgivenmtimemperiod mcanmdiffermfrommthemprofitsmreported.
D) Profitsmaremnomassurancemthat mcashmflow mwillmbemsufficient mtommaintainmsolvency.
E) Duemtomrequired mcashminvestmentsminmcurrent massets,mfast-
growingmand mprofitablemcompaniesmcanmliterallym“grow mbroke”.
13) Whichmof mthemfollowingmismNOTmamtypicalmreasonmformdifferencesmbetweenmprofitsmand mca
shmflow?
A) Goodwill
B) Depreciationmexpense
C) Changesminmaccountsmreceivable
D) Accrualmaccountingmpractices
14) Whichmonemof mthemfollowingmismthemfinancialmstatement mthat mshowsmamfinancialmsnapsh
ot,mtakenmat mampoint minmtime,mof mallmthemassetsmthemcompanymownsmand mallmthemclaimsmagainst m
thosemassets?
A) Incomemstatement
B) Creditor’smstatement
C) Balancemsheet
D) Cashmflow mstatement
E) Sourcesmand musesmstatement
15) A mbalancemsheet mreportsmthemvaluemof mamfirm’smassets,mliabilities,mand mequity
A) overmanmannualmperiod.
B) overmanymperiod mof mtime.
C) at manympoint minmtime.
D) at mthemend mof mthemyearmonly.
, 16) A mcompanymsellsmused mequipment mwithmambookmvaluemof m$100,000mform$250,000mcash.mH
owmwould mthismtransactionmaffect mthemcompany’smbalancemsheet?
A) Equitymrisesm$250,000;mnet mplant mand mequipment mfallsm$250,000.
B) Cashmrisesm$250,000;mnet mplant mand mequipment mfallsm$100,000;mequitymrises m$150,000.
C) Cashmrisesm$250,000;maccountsmreceivablemfallsm$100,000;mgoodwillmrisesm$150,000.
D) Cashmrisesm$250,000;mnet mplant mand mequipment mfallsm$250,000.
17) A mcompanympurchasesmamnew m$10mmillionmbuildingmfinanced mhalf mwithmcashmand mhalf mwit
hmambankmloan.mHow mwould mthismtransactionmaffect mthemcompany’smbalancemsheet?
A) Net mplant mand mequipment mrisesm$10mmillion;mcashmfallsm$10mmillion;mbankmdebt mrisesm
$5mmillion.
B) Net mplant mand mequipment mrisesm$5mmillion;mcashmfallsm$10mmillion;mbankmdebt mrisesm
$5mmillion.
C) Net mplant mand mequipment mrisesm$5mmillion;mcashmfallsm$5mmillion;mbankmdebt mrisesm
$5mmillion.
D) Net mplant mand mequipment mrisesm$10mmillion;mcashmfallsm$5mmillion;mbankmdebt mrisesm
$5mmillion.
18) Whichmonemof mthemfollowingmismthemfinancialmstatement mthat msummarizesmamfirm’smreven
uemand mexpensesmovermamperiod mof mtime?
A) Incomemstatement
B) Balancemsheet
C) Cashmflow mstatement
D) Sourcesmand musesmstatement
E) Market mvaluemstatement
19) Themsourcesmand musesmof mcashmovermamstated mperiod mof mtimemaremreflected minmthe
m m m m m m m m m mm
gins, Jennifer Koski, Todd Mitton
m m m m
Student name:
m
TRUE/FALSE m-mWritem'T'mif mthemstatementmismtruemandm'F'mif mthemstatementmismfalse.
1) Current mliabilitiesmaremdefined masmliabilitiesmwithmammaturitymof mlessmthanmone myear.
⊚ true
⊚ false
2) A mdeclineminmthemNet mProperty,mPlant,mand mEquipment maccount mbetweenmyear-
end m2020mand myear-end m2021mismamclearmindicationmthat mfixed massetsmweremsold mduringm2021.
⊚ true
⊚ false
3) Whenmreportingmfinancialmperformancemformtaxmpurposes,mU.S.mcompanies mprefermtomu
semaccelerated mdepreciationmmethodsmovermthemstraight-linemmethod.
⊚ true
⊚ false
4) AccountingmrulesmrequiremU.S.mcompaniesmtomdepreciatemresearchmand mdevelopment m(R&
D)mexpendituresmusingmthemstraight-linemmethod.
⊚ true
⊚ false
5) Youmcanmconstruct mamsourcesmand musesmstatement mform2021mif myoumhavemamcompany’smye
ar-mend mbalancemsheetsmform2021mand m2022.
⊚ true
⊚ false
6) A mreductionminmlong-termmdebt mismamusemof mcash.
⊚ true
⊚ false
,7) Themaccrualmprinciplemrequiresmthat mrevenue mnot mbemrecognized muntilmpayment mfrommamsale
mismreceived.
⊚ true
⊚ false
8) Anmincreaseminmcashmand mcashmequivalentsmshould mappearmasmamusemof mcashmonmthemsour
cesmand musesmstatement.
⊚ true
⊚ false
9) A mcashmflow mstatement mplacesmeachmsourcemormusemof mcashmintomonemof mthreembro
ad mcategories:moperatingmactivities,minvestingmactivities,mormfinancingm activities.
⊚ true
⊚ false
10) Themcost mof mequitymismusuallymreported monmthemincomemstatement mright mbelow minter
est mexpense.
⊚ true
⊚ false
11) ThemUnited mStatesmwasmonemof mthemfirst mcountriesmtomadopt mInternationalmFinanci
almReportingmStandards.
⊚ true
⊚ false
MULTIPLEmCHOICEm-
mChoosemthemonemalternativemthatmbestmcompletesmthemstatementmormanswersmthemquestion.
12) Whichmof mthemfollowingmstatementsmconcerningmamfirm’smcashmflowsmand mprofitsmismfalse?
, A) Managersmmust mbemat mleast masmconcerned mwithmcashmflowsmasmwithmprofits.
B) Amcompanymthat msellsmmerchandisemat mamprofit mcanmbemassured mof mgeneratingmcashmso
onmenoughmtomreplenishmcashmflowsmrequired mformcontinued mproduction.
C) Themcashmflowsmgenerated minmamgivenmtimemperiod mcanmdiffermfrommthemprofitsmreported.
D) Profitsmaremnomassurancemthat mcashmflow mwillmbemsufficient mtommaintainmsolvency.
E) Duemtomrequired mcashminvestmentsminmcurrent massets,mfast-
growingmand mprofitablemcompaniesmcanmliterallym“grow mbroke”.
13) Whichmof mthemfollowingmismNOTmamtypicalmreasonmformdifferencesmbetweenmprofitsmand mca
shmflow?
A) Goodwill
B) Depreciationmexpense
C) Changesminmaccountsmreceivable
D) Accrualmaccountingmpractices
14) Whichmonemof mthemfollowingmismthemfinancialmstatement mthat mshowsmamfinancialmsnapsh
ot,mtakenmat mampoint minmtime,mof mallmthemassetsmthemcompanymownsmand mallmthemclaimsmagainst m
thosemassets?
A) Incomemstatement
B) Creditor’smstatement
C) Balancemsheet
D) Cashmflow mstatement
E) Sourcesmand musesmstatement
15) A mbalancemsheet mreportsmthemvaluemof mamfirm’smassets,mliabilities,mand mequity
A) overmanmannualmperiod.
B) overmanymperiod mof mtime.
C) at manympoint minmtime.
D) at mthemend mof mthemyearmonly.
, 16) A mcompanymsellsmused mequipment mwithmambookmvaluemof m$100,000mform$250,000mcash.mH
owmwould mthismtransactionmaffect mthemcompany’smbalancemsheet?
A) Equitymrisesm$250,000;mnet mplant mand mequipment mfallsm$250,000.
B) Cashmrisesm$250,000;mnet mplant mand mequipment mfallsm$100,000;mequitymrises m$150,000.
C) Cashmrisesm$250,000;maccountsmreceivablemfallsm$100,000;mgoodwillmrisesm$150,000.
D) Cashmrisesm$250,000;mnet mplant mand mequipment mfallsm$250,000.
17) A mcompanympurchasesmamnew m$10mmillionmbuildingmfinanced mhalf mwithmcashmand mhalf mwit
hmambankmloan.mHow mwould mthismtransactionmaffect mthemcompany’smbalancemsheet?
A) Net mplant mand mequipment mrisesm$10mmillion;mcashmfallsm$10mmillion;mbankmdebt mrisesm
$5mmillion.
B) Net mplant mand mequipment mrisesm$5mmillion;mcashmfallsm$10mmillion;mbankmdebt mrisesm
$5mmillion.
C) Net mplant mand mequipment mrisesm$5mmillion;mcashmfallsm$5mmillion;mbankmdebt mrisesm
$5mmillion.
D) Net mplant mand mequipment mrisesm$10mmillion;mcashmfallsm$5mmillion;mbankmdebt mrisesm
$5mmillion.
18) Whichmonemof mthemfollowingmismthemfinancialmstatement mthat msummarizesmamfirm’smreven
uemand mexpensesmovermamperiod mof mtime?
A) Incomemstatement
B) Balancemsheet
C) Cashmflow mstatement
D) Sourcesmand musesmstatement
E) Market mvaluemstatement
19) Themsourcesmand musesmof mcashmovermamstated mperiod mof mtimemaremreflected minmthe
