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Mlp Unit # 1 – Accounting and Finance

Satisfactory Essays
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Unit # 1 – Accounting and Finance
1. A convertible bond is one which
a. can be exchanged for shares of stock
b. may be called ahead of maturity date by the issuer
c. has a maturity less than 90 days
d. makes no coupon payments and is initially priced at a deep discount

2. The Statement of Cash Flows addresses
a. assets, liabilities, and equity
b. dividends and retained earnings
c. operating, investing, and financing activities
d. working capital and float

3. The cash flow for three investments are:

Year1 Year2 Year3 Year4

A $8000 $0 $0 $0
B $2000 $2000 $2000 $2000
C $0 $0 $4000 $4000
D $4000 $4000 $0 $0

Which of these has the highest present value?
a. A
b. B
c. C
d. D

4. Opportunity cost …show more content…

a. yes, even if they lose money on the order they may gain a customer
b. yes, only the variable costs are relevant to the decision.
c. no, it will lose $40 per machine
d. no, because GAAP requires all costs to be included in the cost of a product

17. An income statement reports results of a business’ operations for
a. its entire history (modified)
b. a period of time
c. its domestic market
d. a given point in time 18. Select the correct statement regarding activity-based costing (ABC). a. ABC uses multiple activity cost centers but a single cost driver. b. ABC uses multiple activity centers and multiple cost drivers. c. ABC does not use cost drivers. d. ABC uses a single activity cost center but multiple cost drivers

19. Under the accrual basis of accounting, expenses are recorded when
a. cash payments are made
b. purchases are authorized
c. they have been incurred
d. every time a sale is made

20. A disadvantage of forming a business as a C corporation is
a. unlimited personal liability
b. double taxation
c. limited life
d. requirement to pay dividends

21. If you invested $100,000 in a one year certificate of deposit that pays 5% interest compounded semiannually, what would be your balance after one year (rounded)?
a. $105,000
b. $110,000
c. $105,062
d. $102,500

22. Flagler Company is deciding on an investment to modernize its production equipment. If the investment is made, equipment with a book

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