Chapter 10
Outstanding common stock refers to the total number of shares:
A. Authorized
B. Issued
C. Issued less treasury stock
D. Issued plus treasury stock
C. Issued less treasury stock
Under what section of the statement of cash flows would you classify dividends paid on common stock?
A. Noncash activity
B. Operating
C. Financing
D. Investing
D. Financing
Comparing changes in net income for one company over time is an example of:
A. Horizontal Analysis
B. Vertical Analysis
C. Diagonal Analysis
D. Both vertical and horizontal analysis
A. Horizontal Analysis
Common stockholders usually have all of the following rights except.
A. To elect board of directors
B. To participate in the day-to-day operations
C. To share in the distribution of assets.
D. To receive dividends when declared
B. To participate in the day-to-day operations
Issued stock refers to the number of shares:
A. Outstanding plus treasury shares
B. Authorized
C. In the hands of stockholders
D. That may be issued under state law
A. Outstanding plus treasury shares
The statement of cash flows reports cash flows from the activities of:
A. Lending; Investing; Financing
B. Operating: Investing: Financing
C. Operating: Purchasing: Investing
D. Borrowing: Paying: Investing
B. Operating, Investing, Financing
Which of the following is an example of horizontal analysis?
A. Comparing debt with equity
B. Comparing cost of goods sold with sales
C. Comparing net income across companies
D. Comparing the growth in sales over time
D. Comparing the growth in sales over time
Which of the following is NOT reported in the stockholders equity section of the balance sheet?
A. Treasury Stock
B. Retained Earnings
C. Common Stock
D. Sales Revenue
D. Sales Revenue
The correct order from the smallest number of shares to the largest number of shares is:
A. issued, authorized, outstanding
B. Outstanding, issued, Authorized
C. Issued, Outstanding, Authorized
D. Authorized, issued, outstanding
B. Oustanding, Issued, Authorized
Operating Cash flows Excludes:
A. Interest Received
B. Dividends Received
C. Dividends Paid
D. Interest Paid
C. Dividends Paid
Which of the following include trend analysis and time-series analysis?
A. Ratio Analysis
B. Diagonal Analysis
C. Vertical Analysis
D. Horizontal Analysis
D. Horizontal Analysis
Dividends received from an investment are classified as an ______ cash flow, and paying dividends on stock issued is classified as an ______ cash flow on the statement of cash flows.
A. Operating: Financing
B. Financing: Operating
C. Operating: Operating
D. Investing: Financing
A. Operating; Financing
The articles of incorporation describe:
A. the nature of the firms business activities
B. The shares of stock to be issued
C. The initial board of directors
D. All of the other answer choices are correct
D. All of the other answer choices are correct
The purchase of treasury stock is classified in the statement of cash flows as:
A. Investing activity
B. Operating activity
C. Financing activity
D. Noncash activity
C. Financing activity
To perform a vertical analysis of an income statement, you would divide each line item on the statement by:
A. Sales
B. Net Income
C. Operating Expense
D. Total Assets
A. Sales
Common size analysis is another term used for:
A. Vertical Analysis
B. Ratio Analysis
C. Diagonal Analysis
D. Horizontal Analysis
A. Vertical Analysis
All publicly held corporations are regulated by what government organization?
A. The Securities and Exchange Commission
B. The Commission on Accounting Procedures
C. The Financial Accounting Standards Board
D. The Accounting Principles Board
A. The Securities and Exchange Commission
Operating activities are both inflows and outflows of cash resulting from the external financing of a business
TRUE/FALSE
FALSE
Financing activities are both inflows and outflows of cash resulting from the external financing of a business
Comparing operating expenses as a percentage of sales is an example of
A. Diagonal Analysis
B. Vertical Analysis
C. Both Vertical and Horizontal Analysis
D. Horizontal Analysis
B. Vertical Analysis
Which of the following is an example of vertical analysis
A. Comparing the change in sales over time
B. Comparing debt with industry averages
C. Comparing income statement items as a percentage of sales
D. Comparing gross profit across companies
C. Comparing Income Statement items as a percentage of sales