Principles of Finance Test Bank – Chapter 5 (Ch5)

PrinciplesofFinance-TestBank-Ch5.docx PrinciplesofFinance-TestBank-Ch5.docx PrinciplesofFinance-TestBank-Ch5.docx
TEST BANK
Principles of Finance


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PrinciplesofFinance-TestBank-Ch5.docx PrinciplesofFinance-TestBank-Ch5.docx PrinciplesofFinance-TestBank-Ch5.docx

, PrinciplesofFinance-TestBank-Ch5.docx PrinciplesofFinance-TestBank-Ch5.docx PrinciplesofFinance-TestBank-Ch5.docx



Principles of Finance



Chapter 5
Test Bank
Financial Statements

These questions and problems can all be solved in a classroom setting using a handheld
financial calculator.

True or False Questions
1. An income statement allows us to evaluate whether a firm has too much debt.
A. True
B. False
Section 5.1 LO 1 Moderate
2. Owner’s equity is either contributed or earned.
A. True
B. False
Section 5.4 LO 1 Easy
3. Stating an income statement in a common size format allows users to evaluate a firm’s
performance in comparison to that of its competitors.
A. True
B. False
Section 5.7 LO 2 Easy
4. Firms often decide when to close their fiscal years based on when their activity comes to a
seasonal low point.
A. True
B. False
Section 5.8 LO 2 Easy

Multiple Choice Questions
1. Which one of these is an expense?
A. Cash
B. Salary expense
C. Prepaid expenses
D. Income taxes payable
Section 5.1 LO 2 Easy



03/30/22 2


PrinciplesofFinance-TestBank-Ch5.docx PrinciplesofFinance-TestBank-Ch5.docx PrinciplesofFinance-TestBank-Ch5.docx