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5 Written questions

5 Matching questions

  1. Income statement
  2. Forecasts
  3. Sales forecast
  4. Percent-of-sales method
  5. Current liabilities
  1. a include obligations that are payable within a year, including accounts payable, accrued expenses, and the current portion of long-term debt.
  2. b reflects the results of the operations of a firm over a specified period of time.
  3. c a projection of a firm's sales for a specified period.
  4. d an estimate of a firm's future income and expenses, based on its past performance, its current circumstances, and its future plans.
  5. e a method for expressing each expense item as a percentage of sales.

5 Multiple choice questions

  1. a company's ability to meet its short-term financial obligations.
  2. if a firm uses percent-of-sales method, then the net result that each expense item (except depreciation) on its income statement will grow at the same rate as sales.
  3. how productively a firm utilizes its assets relative to its revenue and its profits.
  4. calculated by dividing its long-term debt by its shareholders' equity, if it gets too high, it may have trouble meeting its obligations and securing the level of financing needed to fuel its growth.
  5. a snapshot of the company's assets, liabilities, and owner's equity at a specific point in time.

5 True/False questions

  1. Fixed assetsassets used over a longer time frame, such as real estate, buildings, equipment, and furniture.

          

  2. Budgetsitemized forecasts of a company's income, expenses, and capital needs and are also an important tool for financial planning and control.

          

  3. Accounts receivablean estimate of a firm's future income and expenses, based on its past performance, its current circumstances, and its future plans.

          

  4. Current assetsequals the firm's current assets divided by its current liabilities, can tell us about the firm's ability to pay its short-term debts.

          

  5. Pro forma income statementprojections for future periods based on forecasts and are typically completed for two to three years in the future.