Foundations of Business Finance (Peregrine) Question and answers 2023 verified to pass
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Course
Foundations of Business Finance
Institution
Foundations Of Business Finance
Foundations of Business Finance (Peregrine) Question and answers 2023 verified to pass
True or false: The one fixed asset that is not depreciated is land because it seldom declines in value. - correct answer True
__________ liabilities are those due within one year. - correct answer Cur...
Foundations of Business Finance
(Peregrine) Question and answers 2023
verified to pass
True or false: The one fixed asset that is not depreciated is land because it seldom
declines in value. - correct answer True
__________ liabilities are those due within one year. - correct answer Current
__________-__________ __________ liabilities are due after more than a year, and
may include bonds, mortgages, and long-term loans. - correct answer Long-term debt
Name the three types of accounts listed as current liabilities on balance sheets. - correct
answer (1) Accounts Payable
(2) Notes Payable
(3) Accrued Expenses
Accounts payable - correct answer The amounts owed for credit purchases by a firm
Notes payable - correct answer Outstanding short-term loans, typically from
commercial banks
Accrued expenses - correct answer Costs that have been incurred by a firm which
have not yet been paid; examples of accruals include taxes owed to the government
and unpaid wages
The __________ __________ section of a balance sheet provides information about
the claims against a firm held by investors who own preferred and common shares. -
correct answer Stockholders' equity
The Stockholders' equity section of the balance sheet is reflected in four types of
accounts. These include __________ __________, __________ __________,
__________-__________-__________ __________ ___________ __________
__________, and __________ __________. - correct answer (1) preferred stock
(2) common stock
(3) paid-in-capital excess of par
(4) retained earnings
__________ __________ shows the total proceeds from the sale of preferred stock. -
correct answer Preferred stock
__________-__________-__________ __________ __________ __________
__________ equals the number of shares outstanding multiplied by the original selling
, price of the shares, net of the par value. - correct answer Paid-in-capital in excess of
par
__________ __________ equals the number of outstanding common shares multiplied
by the par value per share. - correct answer Common stock
__________ __________ (often $1) is an artifact of earlier pre-computer accounting
methods used to track the number of outstanding shares. It has no relation to the actual
value of the shares. - correct answer Par value
__________ __________ are the cumulative total of the earnings that the firm has
reinvested in its assets and operations since its inception. - correct answer Retained
earnings
The combined value of __________ __________ and __________-__________-
__________ equals the proceeds the firm received when it originally sold shares to
investors (including initial public offerings and rights offerings). - correct answer
common stock, paid-in-capital
The __________ __________ entry on a balance sheet records the value of common
shares that a firm currently holds in reserve. - correct answer treasury stock
The __________ __________ __________ __________ provides a summary of what
cash has gone into and out of a firm because of its operations, investments, and
financing activities during a year. It isolates the firm's operating, investment, and
financing cash flows and reconciles them with changes in its cash and marketable
securities during the year. - correct answer statement of cash flows
A firm's total cash flows can be conveniently divided into three categories. These
include __________ flows, __________ flows, and __________ flows. - correct answer
operating, investment, financing
Operating flows - correct answer Cash inflows and outflows directly related to the
production and sale of products or services
Investment flows - correct answer Cash flows associated with the purchase or sale of
fixed assets and business equity
Financing flows - correct answer Cash flows which result from debt and equity
financing transactions
__________ __________ __________ is the amount of cash flow available to investors
- the providers of debt and equity capital. It represents the net amount of cash flow
remaining after the firm has met all operating needs and has made all required
payments on both long-term (fixed) and short-term (current) investments. - correct
answer Free cash flow
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