FINA 3332: EXAM 3 Practice Test
Questions All Solved Correctly 2026
Edition.
financial statements - Answer accounting reports issued by a firm quarterly and/or annually
that present past performance information and a snapshot of the firm's assets and the financing
of those assets
annual report - Answer the yearly summary of business, accompanying or including financial
statements, sent by US public companies to their stockholders
Generally Accepted Accounting Principles (GAAP) - Answer a common set of rules and a
standard format for public companies to use when they prepare their financial reports
auditor - Answer a neutral third party, which corporations are required to hire, that checks a
firm's annual financial statements to ensure they are prepared according to GAAP, and provides
evidence to support the reliability of the information
balance sheet, statement of financial position - Answer a list of a firm's assets and liabilities
that provides a snapshot of the firm's financial position at a given point in time
assets - Answer the cash, inventory, property, plant, and equipment, and other investments a
company has made
liabilities - Answer a firm's obligations to its creditors
shareholders' equity, stockholders' equity - Answer an accounting measure of a firm's net
worth that represents the difference between the firm's assets and its liabilities
current assets - Answer cash or assets that can be converted into cash within one year
marketable securities - Answer short-term, low-risk investments that can be easily sold and
converted to cash
accounts receivable - Answer amounts owed to a firm by customers who have purchased
goods or services on credit
inventories - Answer a firm's raw materials as well as its work-in-progress and finished goods
, non-current assets - Answer assets that produce tangible benefits for more than one year
depreciation expense - Answer a yearly deduction a firm makes from the amount of its fixed
assets (other than land) over time, according to a depreciation schedule that depends on an
asset's life span
book value - Answer the acquisition cost of an asset less its accumulated depreciation
current liabilities - Answer liabilities that will be satisfied within one year
accounts payable - Answer the amounts owed to suppliers for products or services purchased
with credit
short-term debt, notes payable - Answer loans that must be repaid in the next year
net working capital - Answer current assets - current liabilities
Represents the capital available in the short term to run the business.
long-term debt - Answer any loan or debt obligation with a maturity of more than a year
book value of equity - Answer The difference between the book value of a firm's assets and
its liabilities; also called shareholders' equity and stockholders' equity, it represents the net
worth of a firm from an accounting perspective.
market capitalization - Answer the total market value of equity; equals the market price per
share times the number of shares
market-to-book ratio (price-to-book [P/B] ratio) - Answer The ratio of a firm's market (equity)
capitalization to the book value of its stockholders' equity
value stocks (shares) - Answer firms with low market-to-book ratios
growth stocks (shares) - Answer firms with high market-to-book ratios
enterprise value, total enterprise value - Answer =Market Value of Equity + Debt - Cash
Questions All Solved Correctly 2026
Edition.
financial statements - Answer accounting reports issued by a firm quarterly and/or annually
that present past performance information and a snapshot of the firm's assets and the financing
of those assets
annual report - Answer the yearly summary of business, accompanying or including financial
statements, sent by US public companies to their stockholders
Generally Accepted Accounting Principles (GAAP) - Answer a common set of rules and a
standard format for public companies to use when they prepare their financial reports
auditor - Answer a neutral third party, which corporations are required to hire, that checks a
firm's annual financial statements to ensure they are prepared according to GAAP, and provides
evidence to support the reliability of the information
balance sheet, statement of financial position - Answer a list of a firm's assets and liabilities
that provides a snapshot of the firm's financial position at a given point in time
assets - Answer the cash, inventory, property, plant, and equipment, and other investments a
company has made
liabilities - Answer a firm's obligations to its creditors
shareholders' equity, stockholders' equity - Answer an accounting measure of a firm's net
worth that represents the difference between the firm's assets and its liabilities
current assets - Answer cash or assets that can be converted into cash within one year
marketable securities - Answer short-term, low-risk investments that can be easily sold and
converted to cash
accounts receivable - Answer amounts owed to a firm by customers who have purchased
goods or services on credit
inventories - Answer a firm's raw materials as well as its work-in-progress and finished goods
, non-current assets - Answer assets that produce tangible benefits for more than one year
depreciation expense - Answer a yearly deduction a firm makes from the amount of its fixed
assets (other than land) over time, according to a depreciation schedule that depends on an
asset's life span
book value - Answer the acquisition cost of an asset less its accumulated depreciation
current liabilities - Answer liabilities that will be satisfied within one year
accounts payable - Answer the amounts owed to suppliers for products or services purchased
with credit
short-term debt, notes payable - Answer loans that must be repaid in the next year
net working capital - Answer current assets - current liabilities
Represents the capital available in the short term to run the business.
long-term debt - Answer any loan or debt obligation with a maturity of more than a year
book value of equity - Answer The difference between the book value of a firm's assets and
its liabilities; also called shareholders' equity and stockholders' equity, it represents the net
worth of a firm from an accounting perspective.
market capitalization - Answer the total market value of equity; equals the market price per
share times the number of shares
market-to-book ratio (price-to-book [P/B] ratio) - Answer The ratio of a firm's market (equity)
capitalization to the book value of its stockholders' equity
value stocks (shares) - Answer firms with low market-to-book ratios
growth stocks (shares) - Answer firms with high market-to-book ratios
enterprise value, total enterprise value - Answer =Market Value of Equity + Debt - Cash
