Contemporary Business Chapter 16
Date / Time
Student Score
Passing Score
Result
March 14, 2024
3:19 am
85.71
50
Pass
Contemporary Business Chapter 16
#
Question
Correct
Answer
Student
Answer
Result
Points
Awarded
1
From what Marco has shared, what advice can
you give Marco regarding how his financial
statements might be used?
The financial
statements
provide
information to
external users,
including
lenders,
regarding the
credit worthiness
of a company.
The financial
statements
provide
information to
external users,
including
lenders,
regarding the
credit worthiness
of a company.
Correct
1
2
Based on Marco's observation, which statement
is more accurate?
The financial
statements are
used by internal
users, including
management, to
assist with the
planning and
control activities
of the company.
The financial
statements are
used by internal
users, including
management, to
assist with the
planning and
control activities
of the company.
Correct
1
3
Owners, stockholders, potential investors use
accounting information to
evaluate
company
operations/make
investment
decisions.
evaluate
company
operations/make
investment
decisions.
Correct
1
4
Management uses accounting information to
plan and control
company
operations.
plan and control
company
operations.
Correct
1
5
Lenders and suppliers use accounting
information to
evaluate credit
ratings.
evaluate credit
ratings.
Correct
1
6
Employee and union officials use accounting
information to
provide
information in
contract
negotiations.
provide
information in
contract
negotiations.
Correct
1
7
Government agencies, economic planners, and
consumer groups use accounting information to
evaluate tax
liabilities/approve
new issues of
stocks and
bonds.
evaluate tax
liabilities/approve
new issues of
stocks and
bonds.
Correct
1
8
Marco recalls that Cutting Edge upgraded some
of its production equipment last year. Which
statement would provide Marco with information
on how much cash was spent on these investing
activities?
statement of
cash flows
statement of
cash flows
Correct
1
9
Which of the following statements would provide
Marco with information regarding his equity
position as a shareholder at yearend?
balance sheet
balance sheet
Correct
1
10
Equipment
balance sheet
balance sheet
Correct
1
11
Cash paid for dividends
statement of
cash flows
statement of
cash flows
Correct
1
12
Operating expenses
income
statement
balance sheet
Incorrect
0
13
Inventory held for resale
balance sheet
balance sheet
Correct
1
14
Bank loan
balance sheet
balance sheet
Correct
1
15
Dividends declared but not paid
statement of
shareholders’
equity
statement of
shareholders’
equity
Correct
1
16
Partial repayment of an outstanding loan
statement of
cash flows
statement of
cash flows
Correct
1
17 Sales
income
statement
balance sheet
Incorrect
0
18
Changes in equity
statement of
shareholders’
equity
statement of
shareholders’
equity
Correct
1
19
Cash paid to purchase an asset
statement of
cash flows
statement of
cash flows
Correct
1
20
Money owed to suppliers in the form of accounts
payable
balance sheet
balance sheet
Correct
1
21
Review the email and identify which category of
financial ratios each email is referencing.
leverage
leverage
Correct
1
22
Review the email and identify which category of
financial ratios each email is referencing.
activity
activity
Correct
1
23
Review the email and Identify which category of
financial ratios each email is referencing.
liquidity
liquidity
Correct
1
24
This measures the extent to which a company
relies on debt financing. This is of particular
importance to lenders and investors. Too much
debt may be an indicator of future problems in
meeting loan payments or servicing debt. The
most commonly used ratios are the debt ratio
and the long-term debt to equity ratio.
leverage
profitability
Incorrect
0
25
This is a measure of a company’s ability to meet
its short-term obligations. Two commonly used
ratios include the current ratio and the acid-test
ratio.
liquidity
profitability
Incorrect
0
26
This measures the effectiveness of
management’s use of the company’s resources.
Common ratios include: inventory turnover,
receivable turnover, and total asset turnover.
activity
activity
Correct
1
27
This is a measure of the overall financial
performance of the company over a period of
time. Three most common ratios used are: gross
profit margin, net profit margin, and return on
equity.
profitability
profitability
Correct
1
28
What is your assessment of the company’s
financial performance? Choose the statement
that most closely reflects your assessment and
advice to Marco.
Marco should be
cautious in
proceeding with
this funding
request. Based
on the debt ratio,
the company
could absorb
some debt;
however, the
acid-test ratio
and the inventory
turnover indicate
that the company
may have
excess inventory,
which is
compromising
the company’s
liquidity.
Marco should be
cautious in
proceeding with
this funding
request. Based
on the debt ratio,
the company
could absorb
some debt;
however, the
acid-test ratio
and the inventory
turnover indicate
that the company
may have
excess inventory,
which is
compromising
the company’s
liquidity.
Correct
1
