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FUNDAMENTALS OF CORPORATE FINANCE CH. 2 TEST WITH CORRECT ANSWERS -7
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FUNDAMENTALS OF CORPORATE FINANCE CH. 2 TEST WITH CORRECT ANSWERS -7
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FUNDAMENTALS OF CORPORATE FINANCE CH. 2 TESTWITH CORRECT ANSWERS #7
Balance sheet - correct answer snapshot of the firm. A convenient way of organizing
and summarizing what a firm owns (assets), what a firm owes (liabilities), and the
difference between the two (the firm's equity) at a given point in time.
The assets of the firm - correct answer on a balance sheet, what is listed on the left
hand side?
Liabilities and equity - correct answer what is listed on the right hand side of the balance
sheet?
Current or fixed - correct answer assets are classified as either ______ or ________.
Tangible or intangible - correct answer fixed assets can either be tangible or intangible
Less than a year - correct answer how long is the life of a current asset?
Accounts receivable - correct answer money owed to the firm by its customers
Current or long-term - correct answer liabilities are listed as either ______ or
_________.
Less than one year (meaning they must be paid within one year) - correct answer how
long is the life of current liabilities?
Accounts payable - correct answer money the firm owes to its suppliers
Long term liability - correct answer a debt that is not due in the coming year is classified
as a ______ ________ ________.
Bonds - correct answer long-term debt
Bondholders - correct answer long-term creditors
Shareholder's equity aka common equity - correct answer the difference between the
total value of the assets (current and fixed) and the total value of liabilities (current and
long-term)
Assets - correct answer liabilities + shareholder's equity =
Net working capital - correct answer the difference between a firm's current assets and
its current liabilities
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