1. Cash equivalents area. Short term and highly liquid investments that are readily convertible into cashb. Short term and highly liquid investments that are readily convertible into cash with remainingmaturity of three monthsc. Short term and highly liquid investments that are readily convertible into cash and acquiredthree months before maturityd. Short term and highly liquid marketable equity securities2. This financial analysis tool suggests the number of times average inventory was disposed of during theaccounting period.a. Number of days in inventoryb. Merchandise Inventory Turnoverc Current Ratiod. Average Inventory3. Inventories are assets (choose the incorrect one)a. Held for sale in the ordinary course of businessb. Inthe process of production for salec. In the form of materials or supplies to be consumed in the production process or in therendering of serviced. Held for use in the production or supply of goods or servicesl except:4. Receivable financing includes all exa. Pledging of receivablesb. Assignment of receivablesc Transfer of receivablesd. Factoring of receivables5. Which of the following is usually considered as cash?a. Certificate of depositsb. Checking accountc Money market certificated. Postdated checks6. Which of the following statements is correct?a. The stockholders' equity is a major component of working capital.b. Working capital is a measure of long-term solvency.c. Working capital isd. Working capital is the difference between current assets and current liabilities.fference betva quick assetscurrent liabilities. 7. Working capital management involves investment and financial decisions related to:a. Plant and equipment and current liabilitiesb. Current assets and capital structurec Current assets and current liabilitiesd. Sales and credit8. The following are considered inventories excepta. Merchandised purchased by a retailerb. Land and other property not held for sale d. Materials awaiting use in production processc. Finished goods produced9. Merchandise shipped FOB shipping point on the last day of the year should ordinarily be included ina. The buyer's inventory balanceb. The seller's inventory balanceC. Neither the buyer's nor seller's inventory balanced. Both the buyer's nor seller's inventory balance10. Petty cash fund isa. Separately classified as current assetsb. Money kept on hand for making minor disbursements d. Restricted cashc Set aside for the payment of payroll

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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An asset ( Set that is purchased with the expectation that it will pro or appreciate at s Tuture. Bond sit Investment 2. Hise it in stocke an organization that brings together money from various people and invests ke bonus or omer assets. Hurance ComSION le B. Deposit PSIH Market AAA e liquidity. AV B: 4. It is a form of security that indicates the holder has proportionate ownership in the issuing corporation. A. Bond C. Deposit D. Investment B. Stock 5. An income based on the outstanding principal and current interest rate. A. Active income C. Passive income B. Interest income D. Dividend income 6. It is a fixed-income instrument that signifies a loan made by an investor to a borrower (typically corporate or government). A. Bond B. Stock C. Deposit D. Investment 7. These investments are impractical to invest directly considering storage, transportation, and insurance costs involved. A. Currency C. Commodities D. Investment B. Stock 8. A risk management technique that combines a wide…
Under the capital maintenance concept, which of the following items should be deducted from the increase or decrease in capital? a. Losses on hedging instruments in a cash flow hedge. b. Increase in revaluation surplus. c. Actuarial loss on remeasurement on defined benefit liability. d. Reacquisition of treasury shares.
Capital markets: a.apply only to bonds. b.apply only to stock. c.involve long-term investments. d.None of the above.
Which one of the following is referred as Equity finance? а. a. Sale of money market instruments O b. Sale of bonds. О с O c. Purchase of T-Bills. O d. Issue of shares
Capital market instruments are all equity securities. OA. True OB. False
Which of the following can be categorized as Short term sources of finance? i Equity Shares ii. Trade Credit iii Debenture iv Money Market Instruments a. Only Money Market Instruments b. Only Equity Shares c. Both Equity Shares and Debentures d. Both Money Market Instruments and Trade Credit
Choose the best answer 1.) A place or system that primarily allows trading of financial assets with a maturity of more than one year 2.) Allows trade of commodities and contracts wherein they are to be delivered on a future date but at a set price 3.) A place or system that allows trading of highly liquid and short-term securities A.) Futures market B.) Bond market C.) Primary market D.) Money market E.) Capital market F.) Organized market G.) Over-the-counter market H.) Secondary market I.) Cash market
3. Cash equivalents are a. Short-term and highly liquid investments that are readily convertible into cash b. Short-term and highly liquid investments that are readily convertible into cash with remaining maturity of three months c. Short-term and highly liquid investments that are readily convertible into cash with remaining maturity of three months d. Short-term and highly liquid marketable equity securities
3. These are instruments that derive its value from an underlying asset such as bonds, stocks, commodities, interest, currency, etc. a. Short-term investments b. Derivative securities c. Equity securities d. Debt securities e. None of the above
Which of the following can be categorized as Long term sources of finance ? i Equity Shares ii Trade Credit iii Debenture iv Money Market Instruments a. Both Money Market Instruments and Trade Credit b. Both Equity Shares and Debentures c. Only Equity Shares d. Only Money Market Instruments
TRUE OR FALSE?Cash set aside for bonds payable that will mature currently is shown as current asset.

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