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problem1: Cost of goods sold is an:

[A] Revenue

[B]Expense

[C] Asset

[D] Liability

problem2: An expense is recognized when:

[A] A business pays rent

[B] A business repays a loan

[C] A business buys inventory

[D] A business buys supplies

problem3: Accounts payable increases when:

[A] Customers pay for goods previously purchased on credit

[B] A payment is made for goods purchased on credit

[C] Goods are sold on credit

[D] Goods are purchased on credit

problem4:  Which of the following is an ex of a fixed asset?

[A] Inventory

[B] Cash

[C] Building

[D] Supplies

problem5: Walker Corporation is planning to issue new 20-year bonds. Initially, the plan was to make the bond non-callable. If the bond were made callable after 5 years with a 5% call premium, how would this affect the bond’s required rate of return?

[A] There is no reason to expect a change in the required rate of return.

[B] The required rate of return would decline because the bond would then be less risky to a bondholder.

[C] The required rate of return would increase because the bond would then be more risky to a bondholder.

[D] It is impossible to say without more information.

[E] Because of the call premium, the required rate of return would decline.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M921459

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