C708 Pre-Test Questions 2025/2026
Exam All Answers and Illustrations
Given
1. A company fixed assets of $509 million, total equity of $218 million,
current liabilities of $128 million, and long-term debt of $390 million. What
is the total for the company's current assets?
A. $262 million
B. $227 million
C. $119million
D. $128 million - 🧠 ANSWER ✔✔Total Assets = Total Liabilities + Total
Equity
CA + $509mil (FA) = 128mil (CL) + 390mil (LTD) + 218mil (TE)
CA = 128 + 390 + 218 - 509 = 227mil
1
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PRIVACY STATEMENT. ALL RIGHTS RESERVED
,B
2. A company has just reported sales of $557 million, costs of goods sold of
$150 million, depreciation of $190 million and interest expense of $40.2
million.
What is the company's net income if the tax rate is 35%?
Round your answer to one decimal place.
A. $187.6 million
B.$217.0 million
C. $114.9 million
D. $407.0 million
http://www.investopedia.com/terms/n/netincome.asp - 🧠 ANSWER ✔✔Net
Income = (Total sales - Cost of Goods Sold - Depreciation - Interest
Expense) - (Earnings before taxes * tax rate)
(557 - 150 - 190 - 40.2 = 176.8) - (176.8 * .35 = 61.88) = 114.92 mil
2
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PRIVACY STATEMENT. ALL RIGHTS RESERVED
,B
3. Which item from a company's financial statement is considered a non-
cash item?
A. Intangibles
B. Interest
C. Taxes
D. Utilities - 🧠 ANSWER ✔✔A noncash expense is an expense that is
reported on the income statement of the current accounting period, but
there was no related cash payment during the period. (Amortization,
Interest, Depreciation)
A. Intangibles
4. Use the financial statement for WG Enterprises. What is the cash flow
from financing?
A. $185,000
B. $194,000
C. ($19.000)
3
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
PRIVACY STATEMENT. ALL RIGHTS RESERVED
, D. (S17,000) - 🧠 ANSWER ✔✔Cash Flow From Financing = (Change in
Long Term Debt + Change in Notes Payable + Change in Equity) -
Dividends paid
(708 - 699)+(206-232)+(1530-1698)= 185,000 - 0 (no dividends were paid)
A. $185,000
5. Use the financial statement for Corporation. What. is the cash flow from
investing in millions?
A. ($1,039)
B. $1,039
C. $1,430
D. ($1,430)
http://www.investopedia.com/terms/c/cashflowfinvestingactivities.asp - 🧠
ANSWER ✔✔Cash Flow From Investing = Change in Gross PP&E
4
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
PRIVACY STATEMENT. ALL RIGHTS RESERVED
Exam All Answers and Illustrations
Given
1. A company fixed assets of $509 million, total equity of $218 million,
current liabilities of $128 million, and long-term debt of $390 million. What
is the total for the company's current assets?
A. $262 million
B. $227 million
C. $119million
D. $128 million - 🧠 ANSWER ✔✔Total Assets = Total Liabilities + Total
Equity
CA + $509mil (FA) = 128mil (CL) + 390mil (LTD) + 218mil (TE)
CA = 128 + 390 + 218 - 509 = 227mil
1
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
PRIVACY STATEMENT. ALL RIGHTS RESERVED
,B
2. A company has just reported sales of $557 million, costs of goods sold of
$150 million, depreciation of $190 million and interest expense of $40.2
million.
What is the company's net income if the tax rate is 35%?
Round your answer to one decimal place.
A. $187.6 million
B.$217.0 million
C. $114.9 million
D. $407.0 million
http://www.investopedia.com/terms/n/netincome.asp - 🧠 ANSWER ✔✔Net
Income = (Total sales - Cost of Goods Sold - Depreciation - Interest
Expense) - (Earnings before taxes * tax rate)
(557 - 150 - 190 - 40.2 = 176.8) - (176.8 * .35 = 61.88) = 114.92 mil
2
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
PRIVACY STATEMENT. ALL RIGHTS RESERVED
,B
3. Which item from a company's financial statement is considered a non-
cash item?
A. Intangibles
B. Interest
C. Taxes
D. Utilities - 🧠 ANSWER ✔✔A noncash expense is an expense that is
reported on the income statement of the current accounting period, but
there was no related cash payment during the period. (Amortization,
Interest, Depreciation)
A. Intangibles
4. Use the financial statement for WG Enterprises. What is the cash flow
from financing?
A. $185,000
B. $194,000
C. ($19.000)
3
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
PRIVACY STATEMENT. ALL RIGHTS RESERVED
, D. (S17,000) - 🧠 ANSWER ✔✔Cash Flow From Financing = (Change in
Long Term Debt + Change in Notes Payable + Change in Equity) -
Dividends paid
(708 - 699)+(206-232)+(1530-1698)= 185,000 - 0 (no dividends were paid)
A. $185,000
5. Use the financial statement for Corporation. What. is the cash flow from
investing in millions?
A. ($1,039)
B. $1,039
C. $1,430
D. ($1,430)
http://www.investopedia.com/terms/c/cashflowfinvestingactivities.asp - 🧠
ANSWER ✔✔Cash Flow From Investing = Change in Gross PP&E
4
COPYRIGHT©PROFFKERRYMARTIN 2025/2026. YEAR PUBLISHED 2025. COMPANY REGISTRATION NUMBER: 619652435. TERMS OF USE.
PRIVACY STATEMENT. ALL RIGHTS RESERVED
