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Principles of Finance

Multiple Choice

Principles of FinanceMultiple Choice

1 .
Which of the following is a measure of the performance of a firm’s daily operations?
  1. gross profit
  2. cost of goods sold
  3. operating income
  4. net income
2 .
In which section of the classified balance sheet would you find a note payable due in six months?
  1. current assets
  2. current liabilities
  3. noncurrent liabilities
  4. common stock
3 .
Which financial statement must be prepared first?
  1. statement of retained earnings
  2. balance sheet
  3. statement of cash flows
  4. income statement
4 .
Which of the following represents earned capital on the statement of owner’s equity?
  1. retained earnings
  2. common stock
  3. preferred stock
  4. additional paid-in capital
5 .
Which section of the statement of cash flows reflects the cash generated from or used by a company’s day-to-day operations?
  1. investing activities
  2. financing activities
  3. operating activities
  4. noncash activities
6 .
How do you calculate free cash flow (FCF)?
  1. net income less dividends
  2. operating income less capital expenditures
  3. gross profit less depreciation
  4. net income plus interest
7 .
How do you calculate common-size analysis on the income statement?
  1. income statement line item/gross profit
  2. income statement line item/net income
  3. net sales/income statement line item
  4. income statement line item/net sales
8 .
Which of the following does not represent a filing commonly required by the SEC?
  1. annual report, 10-K
  2. quarterly report, 10-Q
  3. Form 8-K
  4. 1040
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