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?
A. income statement
B. creditor's
statement
C. balance sheet
D. state...
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?
A. income
statement
B. creditor's
statement
C. balance
sheet
D. statement of cash
flows
E. dividend
statement
2. 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.
,3. The common set of standards and procedures by which
audited financial statements are prepared is known as the:
A. matching
principle.
B. cash flow
identity.
C. Generally Accepted Accounting
Principles.
D. Financial Accounting Reporting
Principles.
E. Standard Accounting Value
Guidelines.
4. Which one of the following is the financial statement that summarizes a
firm's revenue and expenses over a period of time?
A. income
statement
B. balance
sheet
C. statement of cash
flows
D. tax reconciliation
statement
E. market value
report
,5. 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 cash
flows.
E. sales which are made using
store credit.
6. The percentage of the next dollar you earn that must be paid in taxes is
referred to as the tax rate.
A. mea
n
B. residu
al
C. tot
al
D. averag
e
E. margin
al
, 7. The tax rate is equal to total taxes divided by total taxable
income.
A. deductib
le
B. residu
al
C. tot
al
D. averag
e
E. margin
al
8. The cash flow of a firm which is available for distribution to the firm's
creditors and stockholders is called the:
A. operating cash
flow.
B. net capital
spending.
C. net working
capital.
D. cash flow from
assets.
E. cash flow to
stockholders.
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 FLOYYD. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $17.99. You're not tied to anything after your purchase.
