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Chapter 02 Test Bank - Static
Student: ___________________________________________________________________________
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.
Which one of these sets forth the common set of standards and procedures by which audited financial statements are prepared?
A. The Matching Principle.
B.
The Cash Flow Identity.
C. Generally Accepted Accounting Principles.
D.
Financial Accounting Reporting Principles.
E. Standard Accounting Value Guidelines.
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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. Mean.
B.
Residual.
C. Total.
D. Average.
E. Marginal.
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