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Accounting 2 Exam 1 Review Flashcards | StudBud
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Accounting 2 Exam 1 Review
Accounting 2 Exam 1 Review
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Cash flow, ratios, and global accounting
Flashcards
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Questions
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Answers
1
the measurement of the relative size of each item included in a total is called
Trend percentage
comparative percentage
percent ratio
Component percentage
2
Where on the cash flow statement would you find: Issue capital stock and payment of dividends
Both are financing activities
Investing and operating respectively
Investing and financing respectively
Financing and Investing respectively
3
one currency stated in terms of another currency
current ratio
clearing price
currency rate
exchange rate
4
what is true about foreign trade zones
they are illegal
goods imported are duty free until they leave the zone
NAFTA does not apply to the zones
they are special tax zones located outside of the US
5
the bottom line in a cash flow statement shows...
cash on the balance sheet at year end
Net income for a cash basis company
net increase (decrease) in cash during the accounting period
cash flow from financing activities
6
when equipment is purchased entirely by a loan...
equipment is shown as an increase in investing activities
this transaction would not affect the cash flow statement
loan is shown as an increase in financing activities
equipment is shown as a decrease in investing activities
7
which of the following does NOT cause net income to differ from net cash
depreciation
timing differences (accrual vs cash)
increase in accounts receivable
gains and losses on sale of plant assets
8
which of the following indicates a cash receipt
increase in inventory
decrease in accounts payable
decrease in account receivable
increase in prepaid expenses
9
which of the following is not one of the forces that affects globalization
Management diversity
Technology and Infrastructure
Economic Systems
Culture
10
In general terms, which of the following is a desirable current ratio?
.2:1
2:1
20:1
1:2
11
A contract that gives a company the right to receive a specified amount of foreign currency is
Strategic Contract
Foreign Currency Contract
Hedging Contract
Futures contract
12
Which of the following indicates a high quality of earnings?
conservative accounting methods
declaration of stock dividends
sales to major customers
earnings from new products
13
Company buys a future contract in foreign currency as a hedging strategy.The company likely has
foreign accounts pay. and expects rates to rise
foreign accounts rec. and expects exchange rates to fall
extra money that they are investing in foreign currency
foreign accounts pay. and expects the exchange rates to fall
14
on a statement of cash flows, CASH includes...
Only cash on hand
only bank account balances
Cash on hand, bank accts., and cash equiv.
Cash on hand and bank account balances
15
the statement of cash flows is not intended to help investors in evaluating
a company's ability to make payment on liabilities
a company's profitability from operations
a company's ability to pay dividends
a company's investment strategy
16
Which of the following measures short-term liquidity
Quick ratio
Debt Ratio
Return on equity
Earnings per share
17
Changes in finances that compare a base year to following years
Trend Percentage
Component Percentage
Ratio
Net income
18
The debt ratio is used to measure
cash available for payment of debt
short term liquidity
long term liquidity
return on investment
