ACCT 2120: EXAM 1
30 Cards in this Set
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Net sales divided by average total assets is the
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Total asset turnover
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Which of the following items is reported on the statement of cash flows under financing activities
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Payment of a cash dividend
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The ability to provide financial rewards sufficient to attract and retain financing is called
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Profitability
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When a bond sells at a premium
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The contract rate is above market rate
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Current assets minus current liabilities is
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Working capital
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The appropriate section in the statement of cash flows for reporting the purchase of land in exchange for common stock is
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Schedule of non-cash investing or financing activity
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External users of financial information
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Are not directly involved in operating the company
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A cash equivalent is an investment that
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All of the choices are correct
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Bonds can be issued
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All of the choices are correct
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Discount on bonds payable account is
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A contra liability
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A company's total liabilities divided by its total stockholders equity is called the
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Debt to equity ratio
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Internal users of financial information
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Are those individuals involved in managing and operating the company
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Net income divided by average total assets is
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Return in total assets
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Promissory notes that require the issuer to make a series of payments consisting of both interest and principal are
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Installment notes
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The indirect method for the preparation of the operating activities section of he statement of cash flows
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Reports net income and then adjusts it for items necessary to determine net cash provided or used by operating activities
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The building blocks of financial statements analysis include
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All of the choices are building blocks of financial statement analysis
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The carrying value of bonds at maturity is always equal to
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The par value that the issuer pays the holder
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The ability to meet short term obligations and to efficiency generate revenues is called
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Liquidity and efficiency
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The statement of cash flows
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A financial statement that reports the cash inflows and cash outflows for an accounting period, and that classifies those cash flows as operating activities, investing activities, or financing activities
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Preparation of the statement of cash flows involves
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All of these are included
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The ability to generate future revenues and meet long term obligations is referred to as
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Solvency
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Net income divided by net sales is the
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Profit margin
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A disadvantage of bonds is
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All of the choices are correct
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Accounting standards
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Require that companies include a statement of cash flows in a complete set of financial statements
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When preparing a statement of cash flows in the indirect method, each of the following should be classified as an operating activity cash flow except
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Proceeds from the disposal of a long term asset with no gain or loss
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Bonds that have an option exercisable by the issuer to retire them at a stated dollar amount prior to maturity are known as
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Callable funds
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A statement of cash flows should reconcile the differences between the beginning and ending balances of
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Cash and cash equivalents
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The ability to generate positive market expectations is called
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Market prospects
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Three of the most common tools of financial analysis are
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Horizontal, vertical, ratio
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A bind holder that owns a $1,000, 10%, 10 year bond has
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The right to receive $1,000 at maturity
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ACCT 2120: EXAM 1