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FOUNDATIONS OF BUSINESS FINANCE (PEREGRINE) EXAM QUESTIONS WITH COMPLETE SOLUTIONS
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FOUNDATIONS OF BUSINESS FINANCE (PEREGRINE) EXAM QUESTIONS WITH COMPLETE SOLUTIONS
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ESTUDYFOUNDATIONS OF BUSINESS FINANCE (PEREGRINE)
EXAM QUESTIONS WITH COMPLETE SOLUTIONS
1. **True or false: The one fixed asset that is not depreciated is land because it seldom declines in
value.**
- A. True
- B. False
**Answer: A. True**
2. **__________ liabilities are those due within one year.**
- A. Short-term
- B. Current
- C. Long-term
- D. Fixed
**Answer: B. Current**
3. **__________-__________ __________ liabilities are due after more than a year, and may include
bonds, mortgages, and long-term loans.**
- A. Short-term debt
- B. Long-term debt
- C. Immediate debt
- D. Future debt
**Answer: B. Long-term debt**
4. **Name the three types of accounts listed as current liabilities on balance sheets.**
- A. Accounts Payable, Notes Payable, Accrued Expenses
- B. Accounts Receivable, Notes Receivable, Prepaid Expenses
- C. Bonds Payable, Mortgages Payable, Lease Payable
- D. Long-term Debt, Short-term Debt, Deferred Taxes
**Answer: A. Accounts Payable, Notes Payable, Accrued Expenses**
5. **The amounts owed for credit purchases by a firm are called __________ payable.**
- A. Accounts
- B. Notes
- C. Salaries
- D. Interest
, ESTUDY
**Answer: A. Accounts**
6. **Outstanding short-term loans, typically from commercial banks, are known as __________
payable.**
- A. Accounts
- B. Notes
- C. Salaries
- D. Bonds
**Answer: B. Notes**
7. **Costs that have been incurred by a firm which have not yet been paid; examples include taxes
owed to the government and unpaid wages, are called __________ expenses.**
- A. Accrued
- B. Deferred
- C. Prepaid
- D. Outstanding
**Answer: A. Accrued**
8. **The __________ __________ section of a balance sheet provides information about the claims
against a firm held by investors who own preferred and common shares.**
- A. Asset
- B. Stockholders' equity
- C. Liabilities
- D. Revenue
**Answer: B. Stockholders' equity**
9. **The Stockholders' equity section of the balance sheet is reflected in four types of accounts. These
include __________ __________, __________ __________, __________-__________-__________
__________ __________ __________ __________, and __________ __________.**
- A. Preferred stock, Common stock, Paid-in-capital excess of par, Retained earnings
- B. Common stock, Bonds payable, Paid-in-capital, Deferred taxes
- C. Treasury stock, Accounts payable, Notes payable, Accrued expenses
- D. Cash, Receivables, Payables, Equity
**Answer: A. Preferred stock, Common stock, Paid-in-capital excess of par, Retained earnings**
10. **__________ __________ shows the total proceeds from the sale of preferred stock.**
- A. Common stock
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