Quiz Final Exam - August 19 PDF

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Final Exam...

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2021/8/20

Quiz: Final Exam - August 19

Final Exam - August 19 Started: Aug 19 at 7:01pm

Quiz Instructions You have 3 hours to complete the exam. The last question will be the Excel spreadsheet you will need to complete the "Expanded Presentation". All files needed to complete this will be in the question. You can submit your completed spreadsheet in the question box.

Please use the following documents to help you complete the exam: File 2 of 4 Exam 2 Acct 560 Student template IBM and Facebook 6-26-20.xlsx (https://wustl.instructure.com/courses/66719/files/3150164/download?download_frd=1)

File 3 of 4 IBM_Annual_Report_2019.pdf

(https://wustl.instructure.com/courses/66719/files/3150170/download?

download_frd=1)

File 4 of 4 Facebook 10K 2019.pdf

(https://wustl.instructure.com/courses/66719/files/3150169/download?download_frd=1)

Question 1

1 pts

An account receivable is an obligation that the firm has to pay to non-employee suppliers, such as vendors who provide raw materials. This account is a current liability because it needs to be paid within one year. True False

Question 2

1 pts

An accrual is recorded in the general journal when cash is received from making a sale True False

Question 3

1 pts

Par value is a liability account and is the dollar amount of the total cost of PP&E that has been allocated to depreciation expense. True False

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Question 4

1 pts

Assets are probable future economic benefits obtained or controlled by a company as a result of past transactions or events. Assets are the economic resources of a business. True False

Question 5

1 pts

Capital structure refers to a measure of how long it takes to convert inventory into cash. True False

Question 6

1 pts

Another name for a firm’s '10-K' is 'proxy statement'. True False

Question 7

1 pts

Contributed capital is calculated by taking a company’s net income for a year divided by the average number of shares outstanding during the year.

True False

Question 8

1 pts

We can think of an income statement as a report showing measures of value created and values expended through operations during a period of time. True

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False

Question 9

1 pts

On the statement of cash flows, cash outflows for paying dividends and acquiring treasury stock is shown in the CFF section.

True False

Question 10

1 pts

Goodwill is an intangible noncurrent asset shown on the balance sheet. Good will is created when an acquiring business purchases a controlling interest in another company and pays more than the fair value of the specifically identifiable assets acquired and the liabilities assumed in a business combination.

True False

Question 11

1 pts

Prepaid assets is a liability account created when the business receives an asset before the business provides the promised product or service. True False

Question 12

1 pts

Generally accepted accounting principles (GAAP) is the authoritative set of concepts, principles, standards (rules) and conventions that determine how financial information is defined, measured, and disclosed. True False

Question 13 https://wustl.instructure.com/courses/66719/quizzes/61447/take

1 pts 3/12

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Quiz: Final Exam - August 19

Equity is known as net assets and is the difference between total assets and total liabilities. True False

Question 14

1 pts

NOPAT is net operating profit after taxes and is an obligation shown on the balance sheet and shows the amount of money the company must repay for past purchases of goods and services. True False

Question 15

1 pts

Many analysts calculate Return on equity (ROE) with net income in the numerator and with shareholders’ equity in the denominator. True False

Question 16

1 pts

Treasury stock is a contra-shareholders’ equity account and it shows the total dollar amount a company has paid to its stockholders to repurchase shares of its stock.

True False

Question 17

1 pts

A general journal is an accounting report that reconciles the statement of shareholders’ equity to comprehensive income. True False https://wustl.instructure.com/courses/66719/quizzes/61447/take

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Question 18

1 pts

Additional paid-in capital is the proceeds received by a company from the sale of stock in excess of the par value. True False

Question 19

1 pts

The account, Deferred income taxes, is an account that shows the number of days it takes to convert inventory into cash. True False

Question 20

1 pts

The amount of cash a company paid in dividend can be found in the balance sheet. True False

Question 21

1 pts

By reviewing IBM’s balance sheets, we learn: IBM must have made an acquisition because the ‘Goodwill’ account increased significantly IBM did not make any treasury stock purchases IBM paid more in dividends during 2019 than it did during 2018 None of the above IBM increased its sales

Question 22 https://wustl.instructure.com/courses/66719/quizzes/61447/take

1 pts 5/12

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By reviewing Facebook’s balance sheets we learn: Facebook’s year-end is June 30 Facebook had positive net income during 2019 None of the above Facebook did not issue any new shares during 2019 The number of people using Facebook’s platform has increased during 2019

Question 23

1 pts

By comparing IBM and Facebook’s balance sheets we learn: ‘Cash and cash equivalents,’ as a percentage of total assets increased more for Facebook than it did for IBM during 2019 None of the above ‘Goodwill,’ as a percentage of total assets was higher for Facebook than IBM Both companies list ‘Accounts payable’ as a non-current asset Both companies shows the amount of ‘Accumulated depreciation’ on the face of the balance sheet

Question 24

1 pts

By comparing IBM and Facebook’s balance sheets we learn: IBM increased it total assets during 2019 more than did Facebook Facebook has more total assets than IBM IBM has an account titled “Retirement and nonpension postretirement benefit obligations’ which represents the assets that IBM has to pay it retired employees Facebook has more marketable securities as a percentage of assets than does IBM None of the above

Question 25

1 pts

By comparing IBM and Facebook’s balance sheets we can infer: During 2019 Facebook has more comprehensive income as a percentage of assets than does IBM

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As of 12/31/19 IBM had more employees than Facebook During 2019 Facebook has more total CFO than IBM None of the above As of 12/31/2019 IBM had almost $20B more total assets than Facebook and more shareholders’ equity than Facebook

Question 26

1 pts

By reviewing IBM’s income statements, we can infer:

IBM has three primary revenue streams, including services, sales, and financing IBM must have made an acquisition IBM’s revenue has been increasing each of the past three years IBM has operations only in the US None of the above

Question 27

1 pts

By reviewing IBM’s income statements, we can infer: IBM’s net income has stayed the same over the three years IBM’s provision for income taxes has been increasing each of the past three years None of the above IBM’s EPS has grown faster than net income for the past three years IBM has had the same weighted-average number of shares outstanding for the past three years

Question 28

1 pts

By reviewing Facebook’s income statements, we see: Facebook’s basic EPS is calculated with a formula that has the shares outstanding as of 12/31/2019 Facebook’s diluted EPS is higher than its basic EPS for the year ended 12/31/2019 Facebook’s total share based compensation expense was $4,836 for 2019 None of the above

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Question 29

1 pts

By reviewing Facebook’s income statements, we can infer:

None of the above Facebook’s retained earnings is bigger than its revenue Facebook has two classes of stock: Class A and Class B (and we can verify this is we review Facebook’s balance sheets) Facebook’s strategy is to focus on high margin, low volume services starting in 2020 Facebook’s CFO is less than its payment of dividends

Question 30

1 pts

By comparing IBM and Facebook’s income statements, we can infer: IBM has a higher net income margin percentage than Facebook for the year ending 12/31/2019 Facebook has more employees that IBM for the year ending 12/31/2019 None of the above IBM has a higher gross margin percentage than Facebook for the year ending 12/31/2019 As a percentage of taxable income, IBM pays a higher percentage of tax than Facebook for the year ending 12/31/2019

Question 31

1 pts

By reviewing IBM’s cash flow statement, we can infer: IBM made a large acquisition during 2019 IBM’s CFO has been increasing each of the past three years None of the above IBM did not take on any new debt during 2019 IBM’s net income has decreased over the past three years

Question 32

1 pts

By reviewing Facebook’s cash flow statement, we can infer:

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Facebook’s net income has been growing at the same rate as its CFO has been over the past three years Facebook had a balance of cash and cash equivalent of 19,279 as of 12/31/2019 Facebook paid $5,182 in cash for employee wages during 2019 Facebook’s cash outflow for CFI is primarily used to purchase PP&E for the year ending 12/31/2019 None of the above

Question 33

1 pts

By comparing IBM and Facebook’s statement of stockholders’ equity, we can infer: Facebook had more total shareholders’ equity than does IBM as of 12/31/2019 IBM did not repurchase any treasury shares during 2019 Facebook has more liquidity than IBM as of 12/31/2019 None of the above Both IBM and Facebook paid dividends during 2019

Question 34

1 pts

Which of the following is true regarding the two companies’ net income as a percentage of revenue for 2019 (please type your answer in the box below): 1. IBM = 12.2% and Facebook = 26.1% 2. None of the above, the correct answers are _____________ and _______________

Edit 12pt

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Insert

Format

Tools Table

Paragraph

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p

0 words

Question 35

1 pts

Which of the following is true regarding the two companies’ ROE for 2019: Facebook’s ROE is more than double that of IBM IBM’s ROE is more than double that of Facebook None of the above IBM and Facebook have similar ROE ratios

Question 36

1 pts

Which of the following is true regarding the two companies’ total asset turnover (TAT) for 2019: Both Facebook and IBM have a TAT less than 1 All of the above TAT is the ratio of net income to total assets Both Facebook and IBM have a TAT greater than 1

Question 37

1 pts

Which of the following is true regarding the two companies’ leverage ratio (shareholders’ equity/total assets) for 2019: IBM has more leverage than Facebook Facebook has more leverage than IBM None of the above Facebook and IBM have similar leverage

Question 38

1 pts

Which of the following is true regarding the two companies’ current ratio (current assets/current liabilities) for 2019:

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None of the above Facebook has a current ratio that is greater than 10 Facebook has a higher current ratio than IBM IBM has a current ratio about equal to Facebook IBM has a higher current ratio than Facebook

Question 39

1 pts

Which of following is true: None of the above As of 12/31/19 IBM has more total assets than Facebook, more shareholders’ equity, a higher ROE, lower current ratio, and a lower net income as a percentage of revenue As of 12/31/19 Facebook has more total assets than IBM, less shareholders’ equity, a higher ROE, lower current ratio, and a lower net income as a percentage of revenue As of 12/31/19 IBM has more total assets than Facebook, less shareholders’ equity, a higher ROE, lower current ratio, and a lower net income as a percentage of revenue As of 12/31/19 IBM has the same amount of assets as Facebook, less shareholders’ equity, a higher ROE, lower current ratio, and a lower net income as a percentage of revenue

Question 40

1 pts

Which of these two companies is a better investment as of June 2020: IBM They are about the same Facebook It is not possible to infer which is the better investment from just analyzing the financial statements, we would also need to determine the stock price (among other things)

Question 41

60 pts

File 2 of 4 Exam 2 Acct 560 Student template IBM and Facebook 6-26-20.xlsx (https://wustl.instructure.com/courses/66719/files/3150164/download?download_frd=1)

File 3 of 4 IBM_Annual_Report_2019.pdf (https://wustl.instructure.com/courses/66719/files/3150170/download?download_frd=1)

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File 4 of 4 Facebook 10K 2019.pdf

(https://wustl.instructure.com/courses/66719/files/3150169/download?

download_frd=1)

Using the Excel template (File 2), create the expanded balance sheets and income statements for IBM and Facebook. You can upload the finished Spreadsheet from here.

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