Fin 320 Final Exam - GVSU -
Hoogstra Questions with
Correct Answers
Valley Fair Inc is financed with 40% debt and 60% equity. The mixture of debt and equity is referred to
the firm's - Correct Answers: Capital Structure
Steven opened a used book store and is both the 100% owner and the store's manager. Which type of
business entity does Steve own if she is personally liable for all the store's debt? - Correct Answers: Sole
proprietorship
The potential conflict of interest between a firm's owner and managers is referred to as which type of
conflict? - Correct Answers: Agency
A corporation - Correct Answers: is a legal entity separate from its owners
Limited Liability companies are primarily designed to - Correct Answers: provide limited liability while
avoiding double taxation
The primary goal of financial management is to maximize which one of the following for a corporation? -
Correct Answers: market value of existing stock
The Sarbanes's Oxley Act in 2002 was prompted by - Correct Answers: corporate accounting and
financial fraud
The accounting statement which measures the revenues, expenses, and net income of a firm over a
period of time is called: - Correct Answers: Income Statement
Which one is defined as the total tax paid divided by the total taxable income? - Correct Answers:
Average Tax Rate
, Cash flow from assets is defined: - Correct Answers: operating cash low minus the change in net working
capital minus net capital spending
Intangible fixed asset - Correct Answers: Copyright
Net working capital - Correct Answers: Accounts payable
Equity Account - Correct Answers: Paid in surplus
Decrease the liquidity level of a firm: - Correct Answers: Cash purchase of inventory
Financial leverage - Correct Answers: increases the potential return to the shareholders
Which is true concerning a firm's Fixed assets - Correct Answers: the market value is the expected selling
price in today's economy
The income statement prepared according to GAPP - Correct Answers: records expenses based on the
matching prinicpal
Depreciation does what to a profitable firm? - Correct Answers: lowers taxes
the matching principal states: - Correct Answers: the costs of producing an item should be recorded
when the sale of that item is recorded as revenue
Builder's Outlet hired new CFO, wants to see trends that are present. Which statement serves her
purposes? - Correct Answers: Common-size income statement
Transaction that increases the liquidity of a firm - Correct Answers: Credit sale of inventory at cost
Increase profit margin - Correct Answers: Decrease in tax rate
Hoogstra Questions with
Correct Answers
Valley Fair Inc is financed with 40% debt and 60% equity. The mixture of debt and equity is referred to
the firm's - Correct Answers: Capital Structure
Steven opened a used book store and is both the 100% owner and the store's manager. Which type of
business entity does Steve own if she is personally liable for all the store's debt? - Correct Answers: Sole
proprietorship
The potential conflict of interest between a firm's owner and managers is referred to as which type of
conflict? - Correct Answers: Agency
A corporation - Correct Answers: is a legal entity separate from its owners
Limited Liability companies are primarily designed to - Correct Answers: provide limited liability while
avoiding double taxation
The primary goal of financial management is to maximize which one of the following for a corporation? -
Correct Answers: market value of existing stock
The Sarbanes's Oxley Act in 2002 was prompted by - Correct Answers: corporate accounting and
financial fraud
The accounting statement which measures the revenues, expenses, and net income of a firm over a
period of time is called: - Correct Answers: Income Statement
Which one is defined as the total tax paid divided by the total taxable income? - Correct Answers:
Average Tax Rate
, Cash flow from assets is defined: - Correct Answers: operating cash low minus the change in net working
capital minus net capital spending
Intangible fixed asset - Correct Answers: Copyright
Net working capital - Correct Answers: Accounts payable
Equity Account - Correct Answers: Paid in surplus
Decrease the liquidity level of a firm: - Correct Answers: Cash purchase of inventory
Financial leverage - Correct Answers: increases the potential return to the shareholders
Which is true concerning a firm's Fixed assets - Correct Answers: the market value is the expected selling
price in today's economy
The income statement prepared according to GAPP - Correct Answers: records expenses based on the
matching prinicpal
Depreciation does what to a profitable firm? - Correct Answers: lowers taxes
the matching principal states: - Correct Answers: the costs of producing an item should be recorded
when the sale of that item is recorded as revenue
Builder's Outlet hired new CFO, wants to see trends that are present. Which statement serves her
purposes? - Correct Answers: Common-size income statement
Transaction that increases the liquidity of a firm - Correct Answers: Credit sale of inventory at cost
Increase profit margin - Correct Answers: Decrease in tax rate
