Test
Chapter 12, 13, 14 Multiple Choice
Preguntas del test (30)
1Corporations invest excess cash for short periods of time in each of the following except
- AEquity securities.
- BHighly liquid securities.
- CLow-Risk securities.
- DGovernment securities.
2Corporations invest in other companies for all of the following reasons except to
- Ahouse excess cash until needed.
- Bgenerate earnings.
- Cmeet strategic goals.
- Dincrease trading of the other companies stock.
3A typical investment to house excess cash until needed is
- Astocks of companies in a related industry.
- Bdebt securities.
- Clow-risk, highly liquid securities.
- Dstock securities.
4A company may purchase a non controlling interest in another firm in related industry
- Ato house excess cash until needed.
- Bto generate earnings.
- Cfor strategic reasons.
- Dfor speculative reasons.
5Pension funds and mutual funds regularly invest in debt and stock securities primarily to
- Agenerate earnings.
- Bhouse excess cash until needed.
- Cmeet strategic goals.
- Dcontrol the company in which they invest.
6At the time of acquisition of a debt investment,
- Ano journal entry is required.
- Bthe cost principle applies.
- Cthe Stock investments account is debited when bonds are purchased.
- Dthe Investment account is credited for its cost plus brokerage fees.
7Which of the following is not a true statement regarding short-term debt investments?
- AThe securities usually pay interest.
- BInvestments are frequently government or corporate bonds.
- CThis type of investment must be currently traded in the securities market.
- DDebt investments are recorded at the price paid less brokerage fees.
8On January 1, 2013, Danner Company purchased at face value, a $1000, 8% bond that pays interest on January 1 and July 1. Danner Company has a calendar year end. The entry for the receipt of interest on July 1, 2013 is
- ACash..........................................40
Interest Revenue .......................40 - BCash.........................................80
Interest Revenue..........................80 - CInterest Receivable................................40
Interest Revenue................................40 - DInterest Receivable.............................80
Interest Revenue..............................80
- ACash..........................................40
9On January 1, 2013, Danner Company purchased at face value, a $1000, 10% bond that pays interest on January 1 and July 1. Danner Company has a calendar year end. The adjusting entry on December 31, 2013 is
- Anot required
- BCash..............50
Interest Revenue..............50 - CInterest Receivable......................50
Interest Revenue.............................50 - DInterest Receivable.....................50
Debt investments...........................50
10On January 1, 2013, Milton Company purchased at face value, a $1000, 4% bond that pays interest on January 1 and July 1. Milton Company has a calendar year end. The entry for the receipt of interest on January 1, 2014 is
- ACash..............................40
Interest Revenue................40 - BCash............................40
Interest Receivable......................40 - CCash....................................20
Interest Revenue...........................20 - DCash.....................................20
Interest Receivable.........................20
- ACash..............................40
11The statement of cash flows should help investors and creditors assess each of the following except the
- Aentity's ability to generate future income.
- Bentity's ability to pay dividends.
- Creasons for the difference between net income and net cash provided by operating activities.
- Dcash investing and financing transactions during the period.
12The statement of cash flows
- Amust be prepared on a daily basis.
- Bsummarizes the operating, financing,and investing activities of an entity.
- Cis another name for the income statement.
- Dis a special section of the income statement.
13Which of the following items is not generally used in preparing a statement of cash flows?
- AAdjusted trial balance.
- BComparative balance sheets.
- CCurrent income statement.
- DAdditional information.
14The primary purpose of the statement of cash flows is to
- Aprovide information about the investing and financing activities during a period.
- Bprove that revenues exceed expenses if there is a net income.
- Cprovide information about the cash receipts and cash payments during a period.
- Dfacilitate banking relationships.
15If a company reports a net loss, it
- Amay still have a net increase in cash.
- Bwill not be able to pay cash dividends.
- Cwill not be able to get a loan.
- Dwill not be able to make capital expenditures.
16In addition to the three basic financial statements, which of the following is also a required financial statement?
- Athe "Cash Budget"
- Bthe Statement of Cash Flows
- Cthe Statement of Cash Inflows and Outflows
- Dthe "Cash Reconciliation"
17The statement of cash flows will not report the
- Aamount of checks outstanding at the end of the period.
- Bsources of cash in the current period.
- Cuses of cash in the current period.
- Dchange in the cash balance for the current period.
18The statement of cash flows reports each of the following except
- Acash receipts from operating activities.
- Bcash payments from investing activities.
- Cthe net change in cash.
- Dcash sales.
19Each of the following are particularly interested in the statement of cash flows except
- Acreditors.
- Bemployees.
- Cshareholders.
- Dgovernment agencies.
20Lending money and collecting the loads are
- Aoperating activities.
- Binvesting activities.
- Cfinancing activities.
- Dnon-cash investing and financing activities.
21Which one of the following is primarily interested in the liquidity of a company?
- AFederal government.
- BStockholders.
- CLong-term creditors.
- DShort-term creditors.
22Which of of the following is not a characteristic generally evaluated in analyzing financial statements?
- ALiquidity
- BProfitability
- CMarketability
- DSolvency
23In analyzing the financial statements of a company, a single item on the financial statements
- Ashould be reported in bold-face type.
- Bis more meaningful if compared to other financial information.
- Cis significant only if it is large.
- Dshould be accompanied by a footnote.
24Short-term creditors are usually most interested in evaluating
- Asolvency.
- Bliquidity.
- Cmarketability.
- Dprofitability.
25Long-term creditors are usually most interested in evaluating
- Aliquidity and solvency.
- Bsolvency and marketability.
- Cliquidity and profitability.
- Dprofitability and solvency.
26Stockholders are most interested in evaluating
- Aliquidity and solvency.
- Bprofitability and solvency.
- Cliquidity and profitability.
- Dmarketability and solvency.
27A stockholder is interested in the ability of a firm to
- Apay consistent dividends.
- Bappreciate in share price.
- Csurvive over a long period.
- Dall of these.
28Comparisons of financial date made within a company are called
- Aintracompany comparisons.
- Binterior comparisons.
- Cintercompany comparisons.
- Dintramural comparisons.
29A technique for evaluating financial statements that expresses the relationship among selected items of financial statement date is
- Acommon size analysis.
- Bhorizontal analysis.
- Cratio analysis.
- Dvertical analysis.
30Which one of the following is not a tool in financial statement analysis?
- AHorizontal analysis.
- BCircular analysis.
- CVertical analysis.
- DRatio analysis.
Información
- Descripción
- Test sobre Chapter 12, 13, 14 Multiple Choice, creado por Natalie Balzert el 25/11/2014.
- Autor
- Natalie Balzert
- Idioma
- English
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