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The rate of return on total assets measures a companys

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Reference no: EM132317467

Question

1. Interest revenue earned on held-to-maturity investments is reported on the income statement in the ________ section.
A. other revenues and expenses
B. current assets
C. operating income
D. minority interest

2. Unrealized gains or losses on available-for-sale investments occur when a company adjusts the investment to ________.

A. fair value but has not yet disposed of the asset
B. fair value when an asset is disposed
C. average value but has not yet disposed of the asset
D. average value when an asset is disposed

3. Realized gains or losses on available-for-sale investments represent the difference between the ________.

A. historical cost and the average market value of the investment
B. historical cost and the current market value of the investment
C. cash received at time of disposition and the fair value of the investment
D. cash received at time of disposition and the cost of the investment

4. The rate of return on total assets measures a company's ________.

A. ability to meet its short-term obligations
B. ability to repay its long-term debt
C. success in using assets to earn income
D. success in earning high returns on investments in stocks and bonds of other companies

5. Which of the following is the correct formula for calculating rate of return on total assets?

A. (Net income + Interest expense) / Average total assets
B. (Net income - Interest expense) / Average total asset
C. (Net income - Interest expense) / Total assets
D. Total equity / Total assets

6. A business's cash receipts and cash payments for a specific period are reported on a(n) ________.

A. income statement
B. balance sheet
C. statement of cash flows
D. cash reconciliation statement

7. Which of the following sections of the statement of cash flows is presented differently between the direct method and indirect method?

A. investing activities
B. financing activities
C. operating activities
D. non-cash activities

8. Which of the following statements accurately describes the statement of cash flows?

A. It shows the relative proportion of debt and assets.
B. It is the link between the accrual-based income statement and the cash reported on the balance sheet.
C. It indicates when long-term debt will mature.
D. It is the link between net income and earnings per share.

9. Which of the following is the typical order of the sections on a statement of cash flows?

A. operating, financing, investing
B. financing, investing, operating
C. investing, operating, financing
D. operating, investing, financing

10. Allen Services purchased 20 delivery vehicles by issuing a 20-year installment note payable for $720,000. On the statement of cash flows, this transaction would be shown in the ________.

Reference no: EM132317467

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