How would the repayment of the principal on long-term bonds payable be reported on the statement of cash flows? Cash inflow from investing activities Cash outflow from investing activities Cash outflow from financing activities Cash inflow from financing activities

Cash outflow from financing activities

Which of the following is generally NOT favorable for a company's financial health? Increase in gross margin percentage Increase in inventory turnover Increase in the average collections period Increase in the current ratio

Increase in the average collections period

Hardee Corporation's average sales period ratio is 60 days. Which action could help improve this ratio? Increase manufacturing costs Increase the sales price Reduce Hardee Corporation's inventory balance Reduce the cost of goods sold

Reduce Hardee Corporation's inventory balance

What does a higher current ratio indicate about Brown Corporation's ability to pay short-term debt? The company has excess cash to pay liabilities The company's long-term debt is coming due within the next year The company's short-term debt is coming due within the next year The company's short-term debt is more likely to be paid on-time and in full

The company's short-term debt is more likely to be paid on-time and in full

Which of the following groups are considered internal control groups within a company? Labor unions, regulatory agencies Managers, marketing department, human resource, and finance Investors, creditors, taxing authorities, customers Suppliers, distributors, external auditors

Managers, marketing department, human resource, and finance

Which groups are considered external control groups that influence a company? Investors, creditors, taxing authorities, customers, labor unions, regulatory agencies Suppliers, distributors, external auditors Internal auditors, compliance officers, board of directors Managers, marketing department, human resource, and finance

Investors, creditors, taxing authorities, customers, labor unions, regulatory agencies

Which of the following are classified as current assets on a balance sheet? Checking account, savings account, accounts receivable, inventory, prepaid insurance, petty cash Goodwill, patents, trademarks Long-term investments, bonds, real estate Accumulated depreciation, computer, building, land

Checking account, savings account, accounts receivable, inventory, prepaid insurance, petty cash

Which items are considered non-current assets on a balance sheet? Accumulated depreciation, computer, building, land Checking account, savings account, accounts receivable Inventory, prepaid insurance, petty cash Goodwill, patents, trademarks

Accumulated depreciation, computer, building, land

What is the difference between current and non-current assets on a balance sheet? Current assets are short-term and converted to cash within a year; non-current assets are long-term investments. Current assets include land and buildings; non-current assets include cash and inventory. Current assets are long-term investments; non-current assets are short-term and converted to cash within a year. Current assets are intangible; non-current assets are tangible.

Current assets are short-term and converted to cash within a year; non-current assets are long-term investments.

What is the fundamental accounting equation? \[ ext{Equity} = ext{Assets} - ext{Liabilities} \] \[ ext{Cash} = ext{Assets} - ext{Liabilities} \] \[ ext{Assets} = ext{Liabilities} + ext{Equity} \] \[ ext{Revenue} = ext{Expenses} + ext{Profit} \]

\[ ext{Assets} = ext{Liabilities} + ext{Equity} \]

What are internal controls and why are they important for companies? They focus on reducing production costs and increasing efficiency. They are used to increase sales and market share. They are strategies for expanding into new markets. They help companies comply with laws, prevent fraud, and ensure integrity in financial reporting.

They help companies comply with laws, prevent fraud, and ensure integrity in financial reporting.

What does the term '2/10 n30' mean in a sales agreement? Buyer must pay the full amount in 10 days with a 2% penalty if late. Buyer gets a 10% discount if paid in 2 days; otherwise, full payment is due in 30 days. Buyer must pay 2% of the total in 10 days and the rest in 30 days. Buyer gets a 2% discount if paid in 10 days; otherwise, full payment is due in 30 days.

Buyer gets a 2% discount if paid in 10 days; otherwise, full payment is due in 30 days.

How is the cost of goods manufactured calculated? Total sales - cost of goods sold Beginning WIP + total manufacturing costs - ending WIP inventory Total revenue - total expenses Beginning inventory + purchases - ending inventory

Beginning WIP + total manufacturing costs - ending WIP inventory

How do you calculate the contribution margin ratio? Unit contribution margin / unit sales price Total revenue / total expenses Net income / total sales Variable cost / fixed cost

Unit contribution margin / unit sales price

What is the formula for calculating the Book Value Per Share? Net Earnings available for common stock / Average number of common shares outstanding Market Price Per Share / Earnings Per Share (Stockholder's Equity - Preferred Stock) / Outstanding Common Shares Current Assets / Current Liabilities

(Stockholder's Equity - Preferred Stock) / Outstanding Common Shares

How do you calculate Earnings Per Share (EPS) for a company? Current Assets - Current Liabilities Net Income / Average Total Stockholder's Equity Market Price Per Share / Earnings Per Share Net Earnings available for common stock / Average number of common shares outstanding

Net Earnings available for common stock / Average number of common shares outstanding

How is Working Capital calculated in financial analysis? Total Liabilities / Total Equity Net Credit Sales / Average Accounts Receivable Current Assets / Current Liabilities Current Assets - Current Liabilities

Current Assets - Current Liabilities

What is the formula for the Current Ratio? Current Assets - Current Liabilities Total Liabilities / Total Assets Net Income / Average Total Assets Current Assets / Current Liabilities

Current Assets / Current Liabilities

How is the Quick Ratio calculated? Total Liabilities / Total Equity Current Assets / Current Liabilities Quick Assets / Current Liabilities Net Credit Sales / Average Accounts Receivable

Quick Assets / Current Liabilities

What is the formula for Accounts Receivable Turnover? Net Income / Average Total Stockholder's Equity Total Liabilities / Total Assets Net Credit Sales / Average Accounts Receivable Current Assets / Current Liabilities

Net Credit Sales / Average Accounts Receivable

How do you calculate Average Accounts Receivable? Current Assets - Current Liabilities Total Liabilities / Total Equity Net Credit Sales / Average Accounts Receivable Add accounts receivable from both years and divide by 2

Add accounts receivable from both years and divide by 2

What is the formula for calculating Net Credit Sales? Net Earnings available for common stock / Average number of common shares outstanding Sales on Account - Discounts - Returns Current Assets / Current Liabilities Total Liabilities / Total Assets

Sales on Account - Discounts - Returns

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