Social Science Questions
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1) What is sales revenue, less cost of goods sold and operating expenses, called for income statement purposes? A) Net profit before taxesB) Retained earningsC) Net income available to preferred shareholdersD) EBIT
10) All of the following statements are true EXCEPT:A) net revenues come mainly from the firm's business operations in the form of sales of products and services.B) net revenue can also come from other non core business sources, such as from interest earned on marketable securities.C) net revenues are after deducting returns, allowances for damages, cash discounts, etc.D) net revenues are after deducting selling and administrative expenses.
4) Which of the following is NOT included as operating income?A) Cost of goods soldB) SalesC) Operating expensesD) Taxes
9) Which of the following best represents operating income?A) Income after investment activitiesB) Earnings before interest and taxesC) income from discontinued operationsD) Income from capital gains
6) Gross profit is calculated as:A) total sales - cost of sales - selling, general, and administrative expenses - depreciation and amortization.B) total sales - cost of sales - selling, general, and administrative expenses.C) total sales - cost of sales.D) None of the above
23) All of the following statements are true EXCEPT:A) retained earnings is common stock minus paid in capital.B) retained earnings are generated when a firm has excess cash.C) retained earnings are the accumulated profits not paid out in dividends.D) All of the above.
12) Earnings before interest and taxes: A) is the same as EBITDA.B) refers to the gross profit minus operating expenses minus interest.C) refers to gross profit minus operating expenses.D) Both A and C.
11) Cost of sales is calculated by:A) adding the cost of inventory on hand at the start of the period minus the cost of any purchases of materials during the year and then subtract the cost of ending inventory.B) adding the cost of the inventory at the start of the period plus the cost of any purchases of materials during the year and then subtract the cost of the ending inventory.C) adding the cost of the inventory on hand at the start of the period plus the cost of any purchases of materials during the year and then add the cost of the ending inventory.D) adding the cost of the inventory on hand at the end of the period plus the cost of any purchases of materials during the year and then subtract the costs of the beginning inventory.
2) The type of financing (whether with debt or equity) does not affect which stream of income? A) Net profit after tax but before dividends.B) Net working capitalC) Operating incomeD) Income before tax
8) Which of the following best represents the stream of income that is available to stockholders?A) Net profit after taxB) Earnings before interest, taxes, and dividendsC) Gross profitD) Operating profit
29) A balance sheet is a statement of the financial position of the firm on a given date, including its asset holdings, liabilities, and equity.
26) Lakeview Industries had sales of $40 million and net income of $2 million in 2012. Lakeview paid a dividend of $1.5 million. Assuming that their beginning balance for retained earnings was $4 million, calculate their ending balance for retained earnings.A) $4.5 millionB) $2.5 millionC) $3 millionD) $4 million*look at table 3.3 (pg 7)Regency Corporation Consolidated Balance Sheet As of December 31, 2011 + 2012
7) The statement of financial performance is known as the: A) statement of cash flows.B) statement of stockholders' equity.C) balance sheet.D) income statement.
5) Which of the following statements regarding the income statement is NOT CORRECT? A) The income statement shows the flow of earnings and expenses generated by the firm between two dates.B) The income statement shows the earnings and expenses at a given point in time.C) The last or"bottom" line of the income statement shows the firm's net income.D) The first line of an income statement lists the revenues from the sales of products or services.
22) All of the following statements are true EXCEPT:A) deferred income taxes can be thought of as a liability.B) deferred income taxes arise because firms are allowed to keep two sets of financial statements; one for shareholders and one for the IRS.C) deferred income taxes arise because firms are allowed to keep two sets of financial statements; one for the shareholders and one for internal management. D) deferred income taxes are also referred to as deferred tax liabilities.
14) A firm reports the following income statement items: sales of $60,550,000; income tax of $1,744,000; operating expenses of $10,115,000; cost of goods sold $34,025,000; and interest expense of $750,000. What is the amount of the firm's income before tax?A) $15,660,000B) $16,410,000C) $13,916,000$14,666,000
28) Total equity on the balance sheet increases as the amount of dividends paid increases.
13) A firm reports the following income statement items: sales of $60,550,000; income tax of $1,744,000; operating expenses of $10,115,000; cost of goods sold $34,025,000; and interest expense of $750,000. What is the amount of the firm's gross profit?A) $23,910,000B) $26,525,000C) $15,660,000D) $16,410,000
24) All of the following statements are true EXCEPT:A) under current accounting rules, plant and equipment appear on a company's balance sheet valued at replacement value.B) plant and equipment are generally reported net of depreciation.C) depreciation reflects the reduction in the value of fixed assets over time.D) land is assume to remain useful indefinitely.
3) Which of the following is NOT included as a tax-deductible expense?A) Dividend expensesB) Marketing expensesC) Depreciation expensesD) Cost of goods sold