ACCOUTING 333 CHAPTER 2 QUIZ

ACCOUTING 333 CHAPTER 2 QUIZ
A current asset is best defined as:
o the market value of all assets currently owned by the firm.
o an asset the firm expects to purchase within the next year.
o the amount of cash on hand the firm currently shows on its balance sheet.
o cash and other assets owned by the firm that will convert to cash within the next year.
o the value of fixed assets the firm expects to sell within the next year
2. Given the tax rates as shown, what is the average tax rate for a firm with taxable income of
$126,500?




o 21.38%
o 23.88%
o 25.76%
o 34.64%
o 39.00%
Tax = .15($50,000) + .25($25,000) + .34($25,000) + .39($126,500 - 100,000) = $32,585
Average tax rate = $32,585/$126,500 = .2576, or 25.76%

3. A(n) ____ asset is one which can be quickly converted into cash without significant loss
in value.
o tangible
o fixed
o intangible
o liquid
o long-term

4. _____ refers to the changes in net capital assets.
• Cash flow from assets
• Net working capital
• Cash flow from investing
• Operating cash flow
• Cash flow to creditors

5. Which of the following are included in current liabilities?
I. Debt payable to a mortgage company in nine months
II. Note payable to a supplier in eighteen months
III. Accounts payable to suppliers
IV. Loan payable to a bank in fourteen months

o I and III only
o II and III only
o III and IV only
o II, III, and IV only
o I, II, and III only