BFIN 300 Test Questions with Correct Answers

BFIN 300 Test Questions with Correct Answers Which one of the following accounts is the most liquid? a.) Inventory b.) Building c.) Accounts Receivable d.) Equipment e.) Land - Answer-c.) Accounts Receivable Noncash items refer to: a.) Accrued expenses b.) Inventory items purchased using credit c.) The ownership of intangible assets such as patents d.) Expenses which do not directly affect net cash flows e.) Sales which are made using store credit - Answer-c.) The ownership of intangible assets such as patents Net working capital is defined as: a.) Total liabilities minus shareholders' equity b.) Current liabilities minus shareholders' equity c.) Fixed assets minus long-term liabilities d.) Total assets minus total liabilities e.) Current assets minus current liabilities - Answer-e.) Current assets minus current liabilities Which one of the following is the financial statement that shows the accounting value of a firm's equity as of a particular date? a.) Income statement b.) Creditor statement c.) Balance sheet d.) Statement of cash flows e.) Dividend statement - Answer-c.) Balance sheet Which one of the following parties has theoretical control of a corporation? a.) Chairman of the board b.) Board of directors c.) Chief executive office d.) Chief operating officer e.) Shareholders - Answer-e.) Shareholders Which one of these set forth the common set of standards and procedures by which audited financial statements are prepared? a.) The Matching Principle b.) The Cash Flow Identity c.) Generally Accepted Accounting Principles d.) Financial Accounting Reporting Principles e.) Standard Accounting Value Guidelines - Answer-c.) Generally Accepted Accounting Principles The cash flow related to interest payments less any new borrowing is called the: a.) Operating cash flow b.) Capital spending cash flow c.) Net working capital d.) Cash flow from assets e.) Cash flow to creditors - Answer-e.) Cash flow to creditors Which one of the following statements concerning net working capital is correct? a.) Net working capital increases when inventory is purchased with cash b.) Net working capital excludes inventory c.) Total assets must increase if net working capital increases d.) Net working capital may be a negative value e.) Net working capital is the amount of cash a firm currently has available for spending - Answer-d.) Net working capital may be a negative value Which of the following are current assets? I. Cash II. Trademark III. Accounts Receivable IV. Notes Payable - Answer-I and III only; cash and accounts receivable