Exam (elaborations)
Fin 3100 Chapter 2 Exam Questions and Complete Solutions Graded A+
- Course
- Institution
Fin 3100 Chapter 2 Exam Questions and Complete Solutions Graded A+
[Show more]
Content preview
Fin 3100 Chapter 2Exam Questions
and Complete
Solutions Graded
A+
Denning [Date] [Course title]
,1) The purpose of studying financial statements is ________.
A) to mechanically build portfolio analysis
B) to understand those portions of the statements that have relevance for financial decision making
C) to primarily investigate all portions of the statements that have relevance for dividend policy
D) to mechanically learn how to read and understand footnotes - Answer: B
2) Which of the statements below is FALSE?
A) The purpose of studying financial statements is to understand those portions of the statements that
have relevance for financial decision making.
B) We need to understand how to interpret and use the information presented in financial statements
to
form a picture of the financial profile of the firm.
C) Accounting, it has been said, looks back to where a company has been — somewhat like looking
through a rear view mirror.
D) Accounting and finance view the numbers in the same way. - Answer: D
3) Understanding the sources and uses of cash in the recent past will enable a manager to ________ the
cash flow for a potential project of the firm.
A) determine with perfect precision
B) forecast with perfect precision
C) predict more accurately
D) know today - Answer: C
4) The fundamental starting point of all the accounting statements is the ________.
A) accounting identity
B) computing identity
C) investing identity
D) financing identity - Answer: A
, 5) Which of the statements below is TRUE?
A) Accounting Identity is: Assets ≡ Liabilities - Owners' Equity.
B) Accounting Identity is: Assets ≡ Liabilities + Owners' Equity.
C) Accounting Identity is: Assets ≡ Owners' Equity - Liabilities.
D) Accounting Identity is: Liabilities ≡ Assets + Owners' Equity. - Answer: B
6) There are four primary financial statements that are used to measure the performance of a firm.
Which of the choices below are included among these four?
A) The balance statement and income statement
B) The income sheet and statement of retained earnings
C) The statement of cash flow and statement of balance
D) The balance sheet and statement of cash flow - Answer: D
7) It is important to remember that the fundamental ________ of accounting is the debit and credit
recording activity where debits always equal credits.
A) effect
B) end product
C) outcome
D) identity - Answer: D
8) It is important to remember that the fundamental identity of accounting is the debit and credit
recording activity where debits ________ equal credits.
A) never
B) seldom
C) sometimes
D) always - Answer: D
9) Which of the statements below is FALSE?
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller YourExamplug. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $13.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
83637 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now