Post ACC305 Unit 5 Ch 7 Self Quiz

Question 1

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When doing financial analysis it is not important to analyze a firm's debt.

Question 2

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Discontinued operations and extraordinary items would be excluded when analyzing a firm's ability to carry debt.

Question 3

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A good times interest earned record would be indicated by a relatively high, stable coverage for the times interest earned coverage.

Question 4

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If an employee is in the pension plan, rights under this plan will be lost if the employee leaves the firm prior to receiving a vested interest.

Question 5

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Capitalization of interest results in interest being deducted from a fixed asset instead of expensed.

Question 6

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Some revenue and expense items never go on the tax return, but do go on the income statement.

Question 7

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Repayment of a long-term bank loan would increase the debt ratio.

Question 8

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Under generally accepted accounting principles, an item must clearly represent a commitment to pay out funds in the future in order to be classified as a liability.

Question 9

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Deferred taxes do not need to be accounted for using the liability method.

Question 10

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The tax code allows a corporation reporting an operating loss for income tax purposes in the current year to carry that loss back and forward to offset reported taxable income.