Foundations of Business Finance (Peregrine) Exam
1. True True or false: The one fixed asset that is not depreciated
is land because it seldom declines in value.
2. Current liabilities are those due within one year.
3. Long-term debt
4. (1) Accounts
Payable
(2) Notes Payable
(3) Accrued Ex-
...
Foundations of Business Finance (Peregrine) Exam
1. True True or false: The one fixed asset that is not depreciated
is land because it seldom declines in value.
2. Current liabilities are those due within one year.
3. Long-term debt - liabilities are due
after more than a year, and may include bonds, mort-
gages, and long-term loans.
4. (1) Accounts Name the three types of accounts listed as current liabili-
Payable ties on balance sheets.
(2) Notes Payable
(3) Accrued Ex-
penses
5. The amounts Accounts payable
owed for credit
purchases by a
firm
6. Outstanding Notes payable
short-term
loans, typically
from commercial
banks
7. Costs that have Accrued expenses
been incurred by
a firm which have
not yet been
paid; examples
of accruals in-
clude taxes owed
to the govern-
ment and unpaid
wages
8. Stockholders' The section of a balance sheet
equity provides information about the claims against a firm held
by investors who own preferred and common shares.
, Foundations of Business Finance (Peregrine) Exam
9. (1) preferred The Stockholders' equity section of the balance
stock sheet is reflected in four types of accounts.
(2) common These include ,
stock , - -
(3) paid-in-capital ,
excess of par and .
(4) retained earn-
ings
10. Preferred stock shows the total proceeds from
the sale of preferred stock.
11. Paid-in-capital in - -
excess of par equals the num-
ber of shares outstanding multiplied by the original selling
price of the shares, net of the par value.
12. Common stock equals the number of outstand-
ing common shares multiplied by the par value per share.
13. Par value (often $1) is an artifact of earlier
pre-computer accounting methods used to track the num-
ber of outstanding shares. It has no relation to the actual
value of the shares.
14. Retained earn- are the cumulative total of the
ings earnings that the firm has reinvested in its assets and
operations since its inception.
15. common stock, The combined value of and
paid-in-capital - - equals the pro-
ceeds the firm received when it originally sold shares
to investors (including initial public offerings and rights
offerings).
16. treasury stock The entry on a balance sheet
records the value of common shares that a firm currently
holds in reserve.
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