Question 1

Which one of the following is an expense for accounting purposes but is not an operating cash flow for financial purposes?

Accepted Answer

A)   Interest expense
B)   Taxes
C)   Cost of goods sold
D)   Labor costs
E)   Administrative expenses

Question 2

Which one of these is most apt to be a fixed cost?

Accepted Answer

A)   Raw materials
B)   Manufacturing wages
C)   Management bonuses
D)   Office salaries
E)   Shipping and freight

Question 3

At the beginning of the year, the long-term debt of a firm was $72,918 and total debt was $138,407. At the end of the year, long-term debt was $68,219 and total debt was $145,838. The interest paid was $6,430. What is the amount of the cash flow to creditors?

Accepted Answer

A)   $1,731
B)   −$1,001
C)   $11,129
D)   $13,861
E)   $19,172

Question 4

A firm has $680 in inventory, $2,140 in fixed assets, $210 in accounts receivables, $250 in accounts payable, and $80 in cash. What is the amount of the net working capital?

Accepted Answer

A)   $970
B)   $720
C)   $640
D)   $3,110
E)   $2,860

Question 5

Which one of the following is excluded from the cash flow from assets?

Accepted Answer

A)   Accounts payable
B)   Inventory
C)   Sales
D)   Interest expense
E)   Cost of goods sold

Question 6

Webster World has sales of $13,800, costs of $5,800, depreciation expense of $1,100, and interest expense of $700. What is the operating cash flow if the tax rate is 23 percent?

Accepted Answer

A)   $6,016
B)   $5,969
C)   $6,574
D)   $7,036
E)   $7,100

Question 7

Webster's has beginning net fixed assets of $684,218, ending net fixed assets of $679,426, and depreciation expense of $48,859. What is the net capital spending for the year if the tax rate is 25 percent?

Accepted Answer

A)   $42,920
B)   $53,651
C)   $44,067
D)   $35,255
E)   $48,600

Question 8

Which one of the following must be true if a firm had a negative cash flow from assets?

Accepted Answer

A)   The firm borrowed money.
B)   The firm acquired new fixed assets.
C)   The firm had a net loss for the period.
D)   The firm utilized outside funding.
E)   Newly issued shares of stock were sold.

Question 9

The value of which one of the following is included in the market value of a firm but is excluded from the firm's book value?

Accepted Answer

A)   Office equipment
B)   Copyright
C)   Distribution warehouse
D)   Employee's experience
E)   Land acquired over 25 years ago

Question 10

Which one of the following statements concerning net working capital is correct?

Accepted Answer

A)   A firm's ability to meet its current obligations increases as the firm's net working capital decreases.
B)   An increase in net working capital must also increase current assets.
C)   Net working capital increases when inventory is sold for cash at a profit.
D)   Firms with equal amounts of net working capital are also equally liquid.
E)   Net working capital is a part of the operating cash flow.

Question 11

Which one of the following statements is correct assuming accrual accounting is used?

Accepted Answer

A)   The addition to retained earnings is equal to net income plus dividends paid.
B)   Credit sales are recorded on the income statement when the cash from the sale is collected.
C)   The labor costs for producing a product are expensed when the product is sold.
D)   Interest is a non-cash expense.
E)   Depreciation increases the marginal tax rate.

Exam 2: Financial Statements, Taxes, and Cash Flow

Which one of the following must be true if a firm had a negative cash flow from assets?

Correct Answer
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Which one of the following is an expense for accounting purposes but is not an operating cash flow for financial purposes?

Correct Answer
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Which one of the following statements is correct assuming accrual accounting is used?

Correct Answer
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Webster World has sales of $13,800, costs of $5,800, depreciation expense of $1,100, and interest expense of $700. What is the operating cash flow if the tax rate is 23 percent?

Correct Answer
verified

Which one of these is most apt to be a fixed cost?

Correct Answer
verified

Which one of the following statements concerning net working capital is correct?

Correct Answer
verified

A firm has $680 in inventory, $2,140 in fixed assets, $210 in accounts receivables, $250 in accounts payable, and $80 in cash. What is the amount of the net working capital?

Correct Answer
verified

Webster's has beginning net fixed assets of $684,218, ending net fixed assets of $679,426, and depreciation expense of $48,859. What is the net capital spending for the year if the tax rate is 25 percent?

Correct Answer
verified

Which one of the following is excluded from the cash flow from assets?

Correct Answer
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At the beginning of the year, the long-term debt of a firm was $72,918 and total debt was $138,407. At the end of the year, long-term debt was $68,219 and total debt was $145,838. The interest paid was $6,430. What is the amount of the cash flow to creditors?

Correct Answer
verified

The value of which one of the following is included in the market value of a firm but is excluded from the firm's book value?

Correct Answer
verified

Exam 2: Financial Statements, Taxes, and Cash Flow

Which one of the following must be true if a firm had a negative cash flow from assets?

Correct AnswerverifiedShow Answer

Which one of the following is an expense for accounting purposes but is not an operating cash flow for financial purposes?

Correct AnswerverifiedShow Answer

Which one of the following statements is correct assuming accrual accounting is used?

Correct AnswerverifiedShow Answer

Webster World has sales of $13,800, costs of $5,800, depreciation expense of $1,100, and interest expense of $700. What is the operating cash flow if the tax rate is 23 percent?

Correct AnswerverifiedShow Answer

Which one of these is most apt to be a fixed cost?

Correct AnswerverifiedShow Answer

Which one of the following statements concerning net working capital is correct?

Correct AnswerverifiedShow Answer

A firm has $680 in inventory, $2,140 in fixed assets, $210 in accounts receivables, $250 in accounts payable, and $80 in cash. What is the amount of the net working capital?

Correct AnswerverifiedShow Answer

Webster's has beginning net fixed assets of $684,218, ending net fixed assets of $679,426, and depreciation expense of $48,859. What is the net capital spending for the year if the tax rate is 25 percent?

Correct AnswerverifiedShow Answer

Which one of the following is excluded from the cash flow from assets?

Correct AnswerverifiedShow Answer

At the beginning of the year, the long-term debt of a firm was $72,918 and total debt was $138,407. At the end of the year, long-term debt was $68,219 and total debt was $145,838. The interest paid was $6,430. What is the amount of the cash flow to creditors?

Correct AnswerverifiedShow Answer

The value of which one of the following is included in the market value of a firm but is excluded from the firm's book value?

Correct AnswerverifiedShow Answer

Correct Answer
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