Finance Test 3

Activities of a firm which require the spending of cash are known as: uses of cash
The sources and uses of cash over a stated period of time are reflected on the: statement of cash flows
A common-size income statement is an accounting statement that expresses all of a firm’s expenses as percentage of sales
Which one of the following standardizes items on the income statement and balance sheet relative to their values as of a common point in time? common-base year statement
Relationships determined from a firm’s financial information and used for comparison purposes are known as financial ratios
The formula which breaks down the return on equity into three component parts is referred to as which one of the following? Du Pont identity
The U.S. government coding system that classifies a firm by the nature of its business operations is known as the Standard Industrial Classification code
Which one of the following is a source of cash? A. increase in accounts receivableB. decrease in notes payableC. decrease in common stockD. increase in accounts payableE. increase in inventory increase in accounts payable(source of cash is an increase in liability/ equity or decrease in asset)
Which one of the following is a use of cash? A. increase in notes payableB. decrease in inventoryC. increase in long-term debtD. decrease in accounts receivablesE. decrease in common stock decrease in common stock(use of cash is a decrease in liability/equity or increase in an asset)
Which one of the following is a source of cash? A. repurchase of common stockB. acquisition of debtC. purchase of inventoryD. payment to a supplierE. granting credit to a customer acquisition of debt(source of cash is an increase in liability/ equity or decrease in asset)
Which one of the following is a source of cash? A. increase in accounts receivableB. decrease in common stockC. decrease in long-term debtD. decrease in accounts payableE. decrease in inventory decrease in inventory(source of cash is an increase in liability/ equity or decrease in asset)
On the Statement of Cash Flows, which of the following are considered financing activities? increase in long-term debt and dividends paid
On the Statement of Cash Flows, which of the following are considered operating activities? costs of goods sold, decrease in accounts payable, interest paid
According to the Statement of Cash Flows, a decrease in accounts receivable will _____ the cash flow from _____ activities. increase; operating
According to the Statement of Cash Flows, an increase in interest expense will _____ the cash flow from _____ activities. decrease; operating
On a common-size balance sheet all accounts are expressed as a percentage of: total assets for the current year
On a common-base year financial statement, accounts receivables will be expressed relative to which one of the following? base-year accounts receivables
A firm uses 2008 as the base year for its financial statements. The common-size, base-year statement for 2009 has an inventory value of 1.08. This is interpreted to mean that the 2009 inventory is equal to 108 percent of which one of the following? 2008 inventory expressed as a percent of 2008 total assets
Which of the following ratios are measures of a firm’s liquidity? interval measure, quick ratio

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