Foundations of Business Finance (Peregrine) Questions and Correct Answers/ Latest Update / Already Graded

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Foundations of Business Finance
(Peregrine) Questions and Correct
Answers/ Latest Update / Already Graded
True or false: The one fixed asset that is not depreciated is land
because it seldom declines in value.

Ans: True


__________ liabilities are those due within one year.

Ans: Current


__________-__________ __________ liabilities are due after more than
a year, and may include bonds, mortgages, and long-term loans.

Ans: Long-term debt


Name the three types of accounts listed as current liabilities on balance
sheets.

Ans: (1) Accounts Payable
(2) Notes Payable
(3) Accrued Expenses


Accounts payable

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Ans: The amounts owed for credit purchases by a firm


Notes payable

Ans: Outstanding short-term loans, typically from commercial
banks


Accrued expenses

Ans: Costs that have been incurred by a firm which have not
yet been paid; examples of accruals include taxes owed to the
government and unpaid wages


The __________ __________ section of a balance sheet provides
information about the claims against a firm held by investors who own
preferred and common shares.

Ans: Stockholders' equity


The Stockholders' equity section of the balance sheet is reflected in
four types of accounts. These include __________ __________,
__________ __________, __________-__________-__________
__________ ___________ __________ __________, and __________
__________.

Ans: (1) preferred stock


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(2) common stock
(3) paid-in-capital excess of par
(4) retained earnings


__________ __________ shows the total proceeds from the sale of
preferred stock.

Ans: Preferred stock


__________-__________-__________ __________ __________
__________ __________ equals the number of shares outstanding
multiplied by the original selling price of the shares, net of the par
value.

Ans: Paid-in-capital in excess of par


__________ __________ equals the number of outstanding common
shares multiplied by the par value per share.

Ans: Common stock


__________ __________ (often $1) is an artifact of earlier pre-computer
accounting methods used to track the number of outstanding shares. It
has no relation to the actual value of the shares.

Ans: Par value

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