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Which of the following are classified as equity accounts on a balance sheet?

1. goodwill
2. paid in capital
3. net income
4. retained earnings

Multiple Choice

• II and IV only

• II, III, and IV only

• I and III only

• I, II, and IV only

• IV only

Which of the following are current assets?

1. inventory
2. goodwill
3. fixed assets
4. cash

Multiple Choice

• I, II, and IV only

• II and III only

• III only

• I and IV only

Pro forma financial statements are statements based on which one of the following?

Multiple Choice

• current period cash flows

• historical asset and liability values

• current period revenues and expenses

• projected future income, cash flows, and other non-cash items

• historical revenue and expenses

Which one of the following is a common feature of preferred stock?

Multiple Choice

• call provision

• preferential treatment over bonds and common stock in the event of a bankruptcy

• steady stream of interest payments

• automatic bankruptcy filing when normal payments to shareholders are suspended

• specified maturity date

Which one of the following statements correctly applies to serial bonds?

Multiple Choice

• Serial bonds are redeemed only if and when they are called.

• Serial bonds are automatically convertible.

• Serial bonds are subissues that have sequential maturities.

• Serial bonds are generally callable.

• Serial bonds within one issue will have the same maturity date.

The holder of a debenture has a claim on which one of the following assets of the issuer in the case of a default?

Multiple Choice

• only income earned prior to the default

• current assets only

• any and all net working capital

• any and all corporate assets remaining after higher legal claims have been satisfied

• only the remaining fixed assets after the secured creditors are paid

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