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Financial Accounting
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Financial leverage is also known as trading on the equity
T
Bonholders share voting rights with stockholders
F
If the net present value of long-term asset under consideration for purchase is negative, then the asset should not be purchased
T
A natural resource is subject to a process called depletion
T
The interest coverage ration is expressed as a percentage
F
A building not currently used because economic conditions have limited a company's expansio is classified properly as property, plant, and equipment
F
In the calculation of free cash flow, dividends and sale of plant assets are both deducted
F
The higher the debt to equity ratio, the greater the financial risk the company is taking
T
Entering into a lease is an example of off-balance-sheet financing
T
Freen cash flow isw a good measure of a company's ability to finance long-term assets
T
The debt to equity ratio is a measured of financial leverage
T
A positive net present value of a long-term asset under consideration for purchase indicates that the asset should probably be purchased
T
A corporation's stockholders are the primary recipients of financial leverage
T
Dividends on stock are tax-deductible to the issuing corporation whereas interest on debt is not
F
A tractor held by a farm equipment company for sale to farmers is classified as a long-term asset
F
The debt to equity ratio is expressed in terms of dollars
F
Asset impairment occurs when the fair value of a long-term asset exceeds its carrying value
F
The practice of off-balance-sheet financing is illegal
F
Book value refers to the market value of a long-term asset
F
Fair value is the amount for which an asset could be bought or sold in a current transaction
T
Author
Anonymous
ID
120337
Card Set
Financial Accounting
Description
Test questions
Updated
2011-12-03T00:27:52Z
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