Archives: Quiz

33) A share of common stock just paid a dividend of $3.25 per share. The expected long-run growth rate for this stock is 18%. If investors require a rate of return of 24%, what should the price of the stock […]

Financial Management: Principles and Applications, 11e (Titman) Chapter 10 Stock Valuation 1) The XYZ Company, whose common stock is currently selling for $40 per share, is expected to pay a $2.00 dividend in the coming year. If investors believe that […]

3) If current market interest rates fall, what will happen to the value of outstanding bonds? A) It will rise. B) It will fall. C) It will remain unchanged. D) There is no connection between current market interest rates and […]

5.25% is payable annually. Investors presently require a rate of return of 8.375%. What is the current market price (intrinsic value) of the bonds? Round off to the nearest $1. A) $1,050 B) $932 C) $681 D) $1,111 Answer: C […]

Financial Management: Principles and Applications, 11e (Titman) Chapter 9 Debt Valuation and Interest Rates 1) The par value of a bond: A) never equals its market value. B) is determined by the investor. C) generally is $1,000. D) is never […]

1) The risk-return relationship for each financial asset is shown on: A) the capital market line. B) the New York Stock Exchange market line. C) the security market line. D) none of the above. Answer: C Diff: 1 Topic: 8.3 […]

33) Using the following information for McDonovan, Inc.’s stock, calculate their expected return and standard deviation. State Probability Return Boom 20% 40% Normal 60% 15% Recession 20% (20%) Topic: 8.1 Portfolio Returns and Portfolio Risk Keywords: expected return Principles: Principle […]

Financial Management: Principles and Applications, 11e (Titman) Chapter 8 Risk and Return-Capital Market Theory 1) Which of the following investments is clearly preferred to the others? Return Risk A 14% 12% B 22% 20% C 18% 16% A) Investment A […]

Use the following to answer the following question(s). Roddy Richards invested $12014.88 in Wolverine Meat Distributors (W.M.D.) five years ago. The investment had yearly arithmetic returns of -9.7%, -8.1%, 15%, 7.2%, and 15.4%. 3) What is the arithmetic average return […]

Financial Management: Principles and Applications, 11e (Titman) Chapter 7 An Introduction to Risk and Return-History of Financial Market Returns 1) You purchased the stock of Sargent Motors at a price of $75.75 one year ago today. If you sell the […]

5) Jay Coleman just graduated. He plans to work for five years and then leave for the Australian “Outback” country. He figures that he can save $3,500 a year for the first three years and $5,000 a year for the […]

65) A compound annuity involves depositing or investing a single sum of money and allowing it to grow for a certain number of years. Topic: 6.1 Annuities Keywords: annuity Principles: Principle 1: Money Has a Time Value 66) When repaying […]

32) George and Barbara will be retiring in four years and would like to buy a lake house. They estimate that they will need $150,000 at the end of four years to buy this house. They want to make four […]

Financial Management: Principles and Applications, 11e (Titman) Chapter 6 The Time Value of Money-Annuities and Other Topics 1) You wish to borrow $2,000 to be repaid in 12 monthly installments of $189.12. The annual interest rate is: A) 24%. B) […]

8) If you want to have $875 in 32 months, how much money must you put in a savings account today? Assume that the savings account pays 16% and it is compounded monthly (round to the nearest $10). A) $630 […]

Use the following information to answer the following question(s). A Max, Inc. deposited $2,000 in a bank account that pays 12% interest annually. 19) What will the dollar amount be in four years, assuming that interest is paid annually? A) […]

Financial Management: Principles and Applications, 11e (Titman) Chapter 5 Time Value of Money-The Basics 1) Financial managers use the time value of money to: A) make business decisions. B) compare cash flows of different projects. C) determine the price of […]

Table 4 Hokie Corporation Comparative Balance Sheet For the Years Ending March 31, 1995 and 1996 (Millions of Dollars) Assets 1995 1996 Current assets: Cash $2 $10 Accounts receivable 16 10 Inventory 22 26 Total current assets $40 $46 Gross […]

Total stockholders’ equity 32,400 Total liabilities and equity $72,000 60) In 1995, ABC’s average collection period is: A) 30 days. B) 32.5 days. C) 25 days. D) 35 days. Topic: 4.3 Using Financial Ratios Keywords: financial ratios Principles: Principle 3: […]

30) Snype, Inc. has an accounts receivable turnover ratio of 7.3. Stork Company has an accounts receivable turnover ratio of 5.0. Which of the following statements is correct? A) Snype’s average collection period is less than Stork’s. B) Stork’s average […]

Financial Management: Principles and Applications, 11e (Titman) Chapter 4 Financial Analysis-Sizing Up Firm Performance 1) Discuss why debt is considered a two-edged sword. Answer: Financing with debt can enhance the return to equity investors during good times. Even though interest […]

2) Fixed assets includes which of the below? A) Inventory B) Patents C) Land Topic: 3.4 The Balance Sheet Keywords: balance sheet Principles: Principle 3: Cash Flows Are the Source of Value 4) Your firm has the following balance sheet […]

19) Which of the following would be included in the calculation of net operating working capital? A) Accounts payable B) Accruals C) Short-term notes payable D) Both A and B E) All of the above Topic: 3.2 The Income Statement […]

Financial Management: Principles and Applications, 11e (Titman) Chapter 3 Understanding Financial Statements, Taxes, and Cash Flows 1) Which of the basic financial statements is best used to answer the question, “How profitable is the business?” A) Balance sheet B) Statement […]

Financial Management: Principles and Applications, 11e (Titman) Chapter 2 Firms and the Financial Market 1) Most businesses are considered to be savers. Answer: FALSE Diff: 1 Topic: 2.1 The Basic Structure of the U.S. Financial Markets Keywords: financial intermediaries Principles: […]

5) If managers are making decisions to maximize shareholder wealth, then they are primarily concerned with making decisions that should: A) positively affect profits. B) increase the market value of the firm’s common stock. C) either increase or have no […]

Financial Management: Principles and Applications, 11e (Titman) Chapter 1 Getting Started-Principles of Finance 1) Which of the following statements best represents what finance is about? A) How political, social, and economic forces affect corporations B) Maximizing profits C) Creation and […]

14. When agency directors make allotments, what budgetary accounts are affected? A. Unapportioned Authority and Allotments–Realized Resources. B. Allotments–Realized Resources and Undelivered Orders. C. Appropriations and Allotments–Realized Resources. D. Allotments–Realized Resources and Expended Appropriations. 15. Assume that Congress enacted an […]

33. A government college received a $2 million grant restricted to research on developing a process for synthesizing a stable triple helix. $500,000 of qualifying research costs were incurred during the year. The college should report: A. Grant revenues of […]

20X8; $20,000 in contributions restricted for use in 20X9; and a $400,000 contribution restricted for the establishment of a permanent endowment. It is anticipated that 10% of all pledges except the endowment pledge will be uncollectible. Pledges receivable for 20X8 […]

A. Required in the basic financial statements and in the CAFR. B. Optional in the basic financial statements but required in the CAFR. C. Optional in the basic financial statements and optional in the CAFR. D. Required in the CAFR. […]

10. A city has a long-term general government liability for compensated absences of $700,000 at the beginning of the year and $650,000 at the end of the year. What adjustment is needed to changes in fund balance to reconcile the […]

(Answer: C; Easy; LO2) 10. For general purpose external financial reporting, discretely presented component unit information A. Is not presented. B. Is included in the government-wide statements only. C. Is included in the fund financial statements only. D. Is included […]

24. If a Self-Insurance Internal Service Fund pays claims of $5,000 during the month, the fund will report A. Expenses of $5,000. B. Transfers out of $5,000. C. Nonoperating expenses of $5,000. D. A decrease in prepaid assets of $5,000. […]

17. The Public Utilities Enterprise Fund was ordered by the court to pay environmental damages of $500,000. The fund is to pay $100,000 immediately and the remaining $400,000 in equal installments for next four years. In the year of the […]

14. The city’s new tax collector foreclosed on a piece of land. The fair market value of the land at the time of foreclosure was $9,000. The taxpayer had acquired the property at a cost of $11,000. The past due […]

15. Assume that a Debt Service Fund does not have nonspendable fund balance. Further assume that after restricted and committed levels of fund balance have properly identified, the remaining balance is a deficit. This deficit fund balance should A. Be […]

22. A city was awarded a $600,000 federal grant to help finance a bridge construction project 60% (nonrefundable) at the beginning of the project in Year 1, and (2) 40% when the project is completed. Capital Projects Fund revenue should […]

14. The General Fund reported a beginning balance of inventory of materials and supplies of $122,000. The ending balance was $150,000. Supplies purchased during the year totaled $600,000. The county uses the consumption method. The General Fund should report expenditures […]

A. Taxes Receivable Allowance for Uncollectible Taxes Revenues $700,000 $14,000 681,000 B. Taxes Receivable Revenues $700,000 $700,000 C. Taxes Receivable $695,000 Expenditures Allowance for Uncollectible Taxes $14,000 Revenues 5,000 686,000 D. Taxes Receivable Allowance for Uncollectible Taxes $14,000 Revenues $700,000 […]

B. The budgetary entry to record an encumbrance would be a debit to Encumbrances and a credit to Encumbrances Outstanding. C. If the actual cost of a purchase exceeds the amount of the original encumbrance, the original encumbrance is still […]

B. A net decrease of $5,000. C. A decrease of $15,000. D. A net increase of $5,000. (Answer: A; Moderate; LO3) 19. The city’s central garage, which is accounted for as an Internal Service Fund, repairs and maintains all of […]

25. Incurring construction costs on a major general government capital project would A. Decrease fund balance in a Capital Projects Fund. B. Decrease cash in the General Capital Assets accounts. C. Increase capital assets in a Capital Projects Fund. D. […]

Governmental and Nonprofit Accounting: Theory and Practice, 10e (Freeman) Chapter 1 Governmental and Nonprofit Accounting—Environment and Characteristics 1. Which of the following would not be considered a government or nonprofit organization? A. A software company that sells software exclusively to […]

Answer: Jackson County Hospital Statement of Revenues, Expenses, and Changes in Net Position For the Year Ended December 31, 20X0 ** Calculations: Patient service charges ($18,000) less charity service ($500) less contractual adjustments ($1,100) less uncollectible accounts ($710). ***Calculations: Net […]

Problem 3 – The following information was derived from the accounts and records of Mockingbird State University for 20X3. All amounts are in thousands of dollars. Tuition and fees Total assessed…………………………………………………………………………………………. $4,000 Expected uncollectible…………………………………………………………………….…….… 80 Appropriations State………………………………………………………………………………………………………. 800 Auxiliary enterprises […]

# Accounts Debit Credit 1 Cash 300 # Accounts Debit Credit 121 Copyright © 2013 Pearson Education, Inc. Unrestricted Support — Contributions 300 2 Cash 1,245 Temporarily Restricted Support – Contributions – Education 43 Temporarily Restricted Support – Contributions – […]

Problem 3 – Statement of Net Position Reconciliation Information about the conversion of the Governmental Funds Balance Sheet to the Statement of Net Position for the City of Pleasant Hill is presented below (all amounts are in thousands of dollars): […]

# Fund or Nonfund Accounts Accounts Debit Credit 1a GF Expenditures – Operating 400 # Fund or Nonfund Accounts Accounts Debit Credit 101 Copyright © 2013 Pearson Education, Inc. Due to Pension Trust Fund 400 1b GF Expenditures – Operating […]

Answers: # Fund or Nonfund Accounts Accounts Debit Credit 1a SC GF Taxes Receivable – Current 12,000 91 Copyright © 2013 Pearson Education, Inc. Allowance for Uncollectible Taxes – Current 240 Revenues – Property Taxes 11,760 1b SC AF Taxes […]