The retail industry has __________ asset turnover ratio compared to that of a capital intensive industry like the auto industry.
A. a higher
B. about the same
C. a higher and lower are both possible
D. a lower
According to FASB, initial franchise fees should be recognized as income when
A. the franchisee shows the ability to pay the fee.
B. the franchisor has substantially performed or satisfied all material services and conditions.
C. the franchisor has collected the majority of fee in cash.
D. the franchisor bills the franchisee.
Which of the following is a long-term liability?
A. Cost of goods sold
B. Bonds
C. Commercial paper
D. Accounts payable
E. None of these answers
The construction of cash flow statement using the indirect method requires which of the following?
I. Income Statement.
II. Balance Sheet.
III. Statement of Retained Earnings.
IV.
Statement of Shareholders' Equity.
A.
I and II
B.
I, II and III
C.
I, II and IV
D.
I and III
The following data are available for a firm for a given year:
Net Sales 21,896 Sales and marketing expenses 4,346 Administrative expenses 2,143 COGS 10,084 Depreciation 967 Interest expense 573 Tax rate 35% Dividends paid 3,445 Preferred Dividends 897 Average total equity 37,432 Average common equity 26,782 Average total liabilities 18,583
In the above example, the firm's return on total capital equals ________.
A. 11.3%
B. 3.9%
C. 5.4%
D. 6.2%
The deferred income tax account
A. none of these answers
B. is always reported as a long-term liability since the tax is not due until the next fiscal year
C. is reported as an other asset even though it has a credit balance
D. is where the difference between income tax expense and income tax payable is reconciled
The correction of an error in the financial statements of a prior-period should be reported, net of applicable income taxes, in the current
A. none of these answers.
B. income statement after income from continuing operations and after extraordinary items.
C. income statement after income from continuing operations and before extraordinary items.
D. retained earnings statement after net income but before dividends.
E. retained earnings statement as an adjustment of the opening balance.
A firm has 400 preferred stocks outstanding. It started the year with 900 common stocks and over the year,
had the following transactions:
Feb 15 Issued 300 common shares.
May 1 Redeemed 100 preferred shares.
Aug 15 Repurchased 150 common shares.
Nov. 30 Issued 400 common shares.
In the calculation of EPS, the number in the denominator would be closest to:
A. 1440
B. 1140
C. 1220
D. 1540
What should an analyst look for when evaluating a firm's cash and cash equivalent position that would cause the firm's cash position to be less liquid?
A. The amount of stock dividends required during the coming year.
B. None of these answers.
C. All of these answers.
D. Potential limitations on the use of cash such as restricted balances.
E. The amount of deposit collection float.
Which of the following would affect both net income and cash flow from operations?
A. credit sale to a customer
B. sale of marketable security for a gain
C. interest payment on capitalized interest
D. none of these answers
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