Financial Accounting

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Author:
Anonymous
ID:
120337
Filename:
Financial Accounting
Updated:
2011-12-02 19:27:52
Tags:
Chapter 10
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Test questions
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  1. Financial leverage is also known as trading on the equity
    T
  2. Bonholders share voting rights with stockholders
    F
  3. If the net present value of long-term asset under consideration for purchase is negative, then the asset should not be purchased
    T
  4. A natural resource is subject to a process called depletion
    T
  5. The interest coverage ration is expressed as a percentage
    F
  6. A building not currently used because economic conditions have limited a company's expansio is classified properly as property, plant, and equipment
    F
  7. In the calculation of free cash flow, dividends and sale of plant assets are both deducted
    F
  8. The higher the debt to equity ratio, the greater the financial risk the company is taking
    T
  9. Entering into a lease is an example of off-balance-sheet financing
    T
  10. Freen cash flow isw a good measure of a company's ability to finance long-term assets
    T
  11. The debt to equity ratio is a measured of financial leverage
    T
  12. A positive net present value of a long-term asset under consideration for purchase indicates that the asset should probably be purchased
    T
  13. A corporation's stockholders are the primary recipients of financial leverage
    T
  14. Dividends on stock are tax-deductible to the issuing corporation whereas interest on debt is not
    F
  15. A tractor held by a farm equipment company for sale to farmers is classified as a long-term asset
    F
  16. The debt to equity ratio is expressed in terms of dollars
    F
  17. Asset impairment occurs when the fair value of a long-term asset exceeds its carrying value
    F
  18. The practice of off-balance-sheet financing is illegal
    F
  19. Book value refers to the market value of a long-term asset
    F
  20. Fair value is the amount for which an asset could be bought or sold in a current transaction
    T

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