# Quize 2

Pages: 5 (618 words) Published: September 29, 2014
﻿Question 1
2 out of 2 points

Art's Boutique has sales of \$640,000 and costs of \$480,000. Interest expense is \$40,000 and depreciation is \$60,000. The tax rate is 34%. What is the net income? Answer

\$39,600

\$39,600

Response Feedback:
Taxable income = \$640,000 - \$480,000 - \$40,000 - \$60,000 = \$60,000; Tax = .34(\$60,000) = \$20,400; Net income = \$60,000 - \$20,400 = \$39,600
Difficulty level: Medium
Ross - Chapter 02 #56
Topic: NET INCOME
Type: PROBLEMS

Question 2
2 out of 2 points

Which of the following are all components of the statement of cash flows? Answer

Cash flow from operating activities, cash flow from investing activities, and cash flow from financing activities Correct Answer:

Cash flow from operating activities, cash flow from investing activities, and cash flow from financing activities

Response Feedback:
correct

Difficulty level: Medium
Ross - Chapter 02 #50
Topic: STATEMENT OF CASH FLOWS
Type: CONCEPTS

Question 3
2 out of 2 points

Brad's Company has equipment with a book value of \$500 that could be sold today at a 50% discount. Its inventory is valued at \$400 and could be sold to a competitor for that amount. The firm has \$50 in cash and customers owe it \$300. What is the accounting value of its liquid assets? Answer

\$750

\$750

Response Feedback:
Liquid assets = \$400 + \$50 + \$300 = \$750

Difficulty level: Medium
Ross - Chapter 02 #54
Topic: LIQUIDITY
Type: PROBLEMS

Question 4
2 out of 2 points

At the beginning of the year, a firm has current assets of \$380 and current liabilities of \$210. At the end of the year, the current assets are \$410 and the current liabilities are \$250. What is the change in net working capital? Answer

-\$10

-\$10

Response Feedback:
Change in net working capital = (\$410 - \$250) - (\$380 - \$210) = -\$10
Difficulty level: Medium
Ross - Chapter 02 #61
Topic: CHANGE IN NET WORKING CAPITAL
Type: PROBLEMS

Question 5
2 out of 2 points

_____ refers to the cash flow that results from the firm's ongoing, normal business activities. Answer

Cash flow from operating activities

Cash flow from operating activities

Response Feedback:
correct

Difficulty level: Medium
Ross - Chapter 02 #10
Topic: CASH FLOW FROM OPERATING ACTIVITIES
Type: DEFINITIONS

Question 6
2 out of 2 points

A(n) ____ asset is one which can be quickly converted into cash without significant loss in value. Answer

liquid

liquid

Response Feedback:
correct

Difficulty level: Easy
Ross - Chapter 02 #5
Topic: LIQUID ASSETS
Type: DEFINITIONS

Question 7
2 out of 2 points

The financial statement showing a firm's accounting value on a particular date is the: Answer

balance sheet.

balance sheet.

Response Feedback:
correct

Difficulty level: Easy
Ross - Chapter 02 #1
Topic: BALANCE SHEET
Type: DEFINITIONS

Question 8
2 out of 2 points

Which equality is the basis for the balance sheet?

Assets = Liabilities + Stockholder's Equity

Assets = Liabilities + Stockholder's Equity

Response Feedback:
correct

Difficulty level: Medium
Ross - Chapter 02 #38
Topic: BALANCE SHEET
Type: CONCEPTS

Question 9
2 out of 2 points

average

average

Response Feedback:
correct

Difficulty level: Easy
Ross - Chapter 02 #9
Topic: AVERAGE TAX RATES
Type: DEFINITIONS

Question 10
2 out of 2 points...