5 _______are decreases in economic benefits during the accounting period in the form of outflows or reductions in assets or increases in liabilities that result in decreases in equity, other than those relating to distributions to equity participants. a. Profit b. Expenses c. Income d. None of the given options

5 _______are decreases in economic benefits during the accounting period in the form of outflows or reductions in assets or increases in liabilities that result in decreases in equity, other than those relating to distributions to equity participants. a. Profit b. Expenses c. Income d. None of the given options

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Using common-size balance sheet percentages to project individual assets, liabilities, or shareholders' equity has all of the following shortcomings except: a. Individual assets, liabilities, and shareholders' equity are independent of each other. b. The common-size percentages do not permit the analyst to easily change the assumptions about the future behavior of an individual asset or liability. c. Individual assets, liabilities, and shareholders' equity are not independent of each other. d. If a company experiences changing proportions for investments in securities among its assets, other asset categories may show decreasing percentages in some years even though their dollar amounts are increasing.
1. Refers to the inability of the business to meet its obligations as they mature on account of insufficient resources. A. Default risk B. Interest-rate risk C. Purchasing power risk D. Liquidity risk 2. A type of risk that relates to changes in the prime interest rate which have significant effects on the cost of money but not directly on the liquidity of the business. A. Financial risk B. Interest-rate risk C. Purchasing power risk D. Liquidity risk 3. Refers to the changes in the conditions and those variables affecting the cost of capital, capital structure and also management decisions made to directly influence the market price of a stock. A. Financial risk B. Interest-rate risk C. Purchasing power risk D. Liquidity risk
29 Which of the following statements about revenues and expenses is correct? Multiple Choice Credits increase both revenues and expenses. Credits increase expenses and decrease revenues. Credits increase revenues and decrease expenses. Credits decrease both revenues and expenses.
Which of the following is not a factor in producing earnings forecasts? a) Estimating the level of dividends b) Separation of recurring and nonrecurring components c) Recognizing potential earnings management d) Recognizing potential income smoothing
High interest coverage ratio does not indicate O a. The ability to pay future dividends O b. No other answer is true O c. The ability to pay interest O d. The percentage of operating profit paid as an interest
Which activity decreases cash? Increasing current liabilities Decreasing fixed assets Increasing long-term debt Decreasing equity
1- What are the consequences of poor internal equity? 2- What are the consequences of poor external equity? 3- How can pay grades help prevent internal equity problems?
An increase in interest rates would mostly harm the ___. 1. creditors 2. debtors 3. lenders 4. providers of funds
What is the stuitable strategy to do for, Operating cash does not cover debt, PE Ratio, EPS Ratio, and ROE cannot be calculated because of its unprofitability, andDebt to equity ratio is higher than accepted percentage?
Creditors look for Select one: a. Net working capital for their safety b. Balance net working capital for their safety c. None of the options d. High net working capital for their safety e. Less net working capital for their safety
Which of the following statements are true about the interest-burden ratio? Check all that apply: It can be expressed as EBIT/Interest Expense. If the company has no financial leverage, the interest-burden ratio will be equal to 0. A company with higher financial leverage will have a lower interest-burden ratio. If the company has no financial leverage, the interest-burden ratio will be equal to 1. It can be expressed as Net profits/Pretax profits.
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