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Chapter 02
Financial Statements, Taxes, and Cash Flow
Multiple Choice Questions
1.
Which one of the following is the financial statement that shows the
accounting value of a firm's equity as of a particular date?
2.
Net working capital is defined as:
3.
The common set of standards and procedures by which audited financial
statements are prepared is known as the:
4.
Which one of the following is the financial statement that summarizes a
firm's revenue and expenses over a period of time?
5.
Noncash items refer to:
6.
The percentage of the next dollar you earn that must be paid in taxes is
referred to as the _____ tax rate.
7.
The _____ tax rate is equal to total taxes divided by total taxable income.
8.
The cash flow of a firm which is available for distribution to the firm's
creditors and stockholders is called the:
9.
Which term relates to the cash flow which results from a firm's ongoing,
normal business activities?
10.
Cash flow from assets is also known as the firm's:
11.
The cash flow related to interest payments less any net new borrowing is
called the:
12.
Cash flow to stockholders is defined as:
13.
Which one of the following is classified as an intangible fixed asset?
14.
Which of the following are current assets?
I. patent
II. inventory
III. accounts payable
IV. cash
15.
Which one of the following is included in a firm's market value but yet is
excluded from the firm's accounting value?
16.
Which of the following are included in current liabilities?
I. note payable to a supplier in eight months
II. amount due from a customer next month
III. account payable to a supplier that is due next week
IV. loan payable to the bank in fourteen months
17.
Which one of the following will increase the value of a firm's net working
capital?
18.
Which one of the following statements concerning net working capital is
correct?
19.
Which one of the following statements concerning net working capital is
correct?
20.
Which one of the following accounts is the most liquid?
21.
Which one of the following represents the most liquid asset?
22.
Which one of the following statements related to liquidity is correct?
