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Accounting MCQs




Question;Which of the following financial ratios is the best measure of the operating effectiveness of a firm's management?Question 1 answerscurrent rationet profit marginquick ratioOIROIQuestion 2 text Question 2 2 points Save The corporation is a legal entity separate from it owners, thus it is possible for the corporation to continue even upon the death of one or more shareholders.Question 2 answersTrueFalseQuestion 3 text Question 3 2 points Save In making financial decisions, the relevant tax rate is the:Question 3 answersmarginal tax rate.average (effective) tax rate.previous year's tax rate.maximum allowable tax rate.Question 4 text Question 4 2 points Save Based on the information in the table, calculate the after tax cash flow from operations for 2002 (no assets were disposed of during the year, and there was no change in interest payable or taxes payable);Jones CompanyFinancial InformationDecember 2001 December 2002;Net income $1,500 $3,000Accounts receivable 750 750Accumulated depreciation 1,125 1,500Common stock 4,500 5,250Paid-in capital 7,500 8,250Retained earnings 1,500 2,250Accounts payable 750 750Question 4 answers$3,750$3,375$3,000$2,250Question 5 text Question 5 2 points Save Which of the following are tax deductible items to a corporation:Question 5 answersinterest expensesdividends to common stockholdersdividends to preferred stockholdersNone of the above are tax deductible.Question 6 text Question 6 2 points Save The market price of the firm's stock reflects the value of the firm as seen by its owners.Question 6 answersTrueFalseQuestion 7 text Question 7 2 points Save Corporate debt markets clearly dominate the corporate equity markets when new funds are being raised.Question 7 answersTrueFalseQuestion 8 text Question 8 2 points Save You are considering an investment in a U.S. Treasury bond but you are not sure what rate of interest it should pay. Assume that the real risk-free rate of interest is 1.0%, inflation is expected to be 2.0%, the maturity risk premium is 1.5%, and, the default risk premium for AAA rated corporate bonds is 3%. What rate of interest should the U.S. Treasury bond pay?Question 8 answers7.5%4.5%3.5%3.0%Question 9 text Question 9 2 points Save The telecommunications system that provides a national information linkup among brokers and dealers operating in the over-the-counter market is called:Question 9 answersNCISNSQANASDAQNASQQuestion 10 text Question 10 2 points Save Which of the following represents an attempt to measure the net results of the firm's operations (revenues versus expenses) over a given time period?Question 10 answersBalance SheetStatement of Cash FlowsIncome StatementSources and Uses of Funds StatementQuestion 11 text Question 11 2 points Save The goal of the firm should be:Question 11 answersmaximization of profits (net income per share)maximization of shareholder wealthmaximization of market sharemaximization of salesQuestion 12 text Question 12 2 points Save The term structure of interest rates usually indicates that longer terms to maturity have higher expected returns.Question 12 answersTrueFalseQuestion 13 text Question 13 2 points Save If a firm has unused debt capacity and the general level of equity prices is depressed, financial executives will favor the issuance of debt securities over the issuance of new common stock.Question 13 answersTrueFalseQuestion 14 text Question 14 2 points Save Capital market instruments include:Question 14 answersnegotiable certificates of depositcorporate equitiescommercial paperTreasury billsQuestion 15 text Question 15 2 points Save "The markets are quick and the prices are right" describes a market that is:Question 15 answerseffervescenteffectiveefficienteffluentQuestion 16 text Question 16 2 points Save PDQ Corp. has sales of $3,000,000, the firm's cost of goods sold is $1,425,000, and its total operating expenses are $700,000. The firm's interest expense is $230,000, and the corporate tax rate is 40%. The firm paid dividends to preferred stockholders of $30,000, and the firm distributed $60,000 in dividend payments to common stockholders. What is PDQ's "Addition to Retained Earnings?"Question 16 answers$297,000$327,000$387,000$477,000Question 17 text Question 17 2 points Save PDQ Corp. has sales of $3,000,000, the firm's cost of goods sold is $1,425,000, and its total operating expenses are $700,000. What is PDQ's EBIT?Question 17 answers$ 825,000$ 875,000$1,575,000$2,300,000


Paper#44816 | Written in 18-Jul-2015

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