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CFI FMVA 8 Exam Quizzes with Correct Answers
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CFI FMVA 8 Exam Quizzes with Correct Answers
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CFI FMVA 8 Exam Quizzes with CorrectAnswers
Included in another income statement line item: Other Costs of Revenue if production
facilities; General and Administrative if company headquarters - ✔✔Included in
another income statement line item: Other Costs of Revenue if production facilities;
General and Administrative if company headquarters
Is income tax expense/provision what the firm typically pays?
Yes
No - ✔✔No
Correct. Income Tax Expense is NOT what the firm typically pays. Actual payments -
$355m (2019), $245m (2018), $430m (2017).
Retained Earnings (RE): changes every year, what is the formula?
RE (next year) = RE (current year) + Net Income (current year)
RE (next year) = RE (current year)
RE (next year) = RE (current year) + Net Income (current year) - Dividend (current year) -
✔✔RE (next year) = RE (current year) + Net Income (current year) - Dividend (current
year)
How would you classify the financial strength of Intuit?
,Strong
Weak
Average - ✔✔Strong
Is income tax expense/provision what the firm typically pays?
No, firm pays more
Yes
No, firm could pay more or less
No, firm pays less - ✔✔No, firm could pay more or less
Based on current year information, what is the formula for next year's Retained Earnings
(RE)?
RE (next year) = RE (current year) + Net Income (current year)
RE (next year) = RE (current year) + Net Income (current year) - Dividend (current year)
RE (next year) = RE (current year) + Net Income (current year) + Dividend (current year)
RE (next year) = RE (current year) - ✔✔RE (next year) = RE (current year) + Net
Income (current year) - Dividend (current year)
Why do you add back Depreciation and Amortization? Where do you find this number?
,Non-cash expense. Cash Flow Statement.
Non-cash expense. Income Statement.
Cash Flow. Cash Flow Statement.
Cash Flow. Income Statement. - ✔✔Non-cash expense. Cash Flow Statement.
Is Cash Taxes Paid the same as Income Tax Provision? Where does the taxes paid
number come from?
Yes. Income Statement.
No. Cash Taxes Paid = Income Tax Provision + Change in Deferred Tax Liabilities
No. Cash Taxes Paid = Income Tax Provision - Change in Deferred Tax Liabilities
No. Cash Taxes Paid = Income Tax Provision + Change in Deferred Tax Liabilities - Change
in Deferred Tax Assets - ✔✔No. Cash Taxes Paid = Income Tax Provision + Change in
Deferred Tax Liabilities
If Current Operating Assets increase, how do you appropriately adjust the cash flow for
the net working capital change?
Decrease Cash Flow by the amount that the Current Operating Assets increased
Increase Cash Flow by the amount that the Current Operating Assets increased -
✔✔Decrease Cash Flow by the amount that the Current Operating Assets increased
What is Free Cash Flow?
, Discretionary cash flow that the firm can either retain and keep the cash or pay out to
bondholders and/or stockholders
Discretionary cash flow that the firm must pay out to bondholders
Discretionary cash flow that the firm must pay out to bondholders and/or stockholders
Discretionary cash flow that the firm must pay out to stockholders - ✔✔Discretionary
cash flow that the firm can either retain and keep the cash or pay out to bondholders
and/or stockholders
Free Cash Flow = Cash Flow from Assets (CF(A))?
False
True - ✔✔False
What is the main difference between financial and accounting cash flow statements?
Debt
Interest
Taxes
Equity - ✔✔Interest
What is Free Cash Flow?
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