BUS 401 – W1 QuizA+

BUS 401 – W1 Quiz

BUS 401 – W1 Quiz

1.

Question :

Which is not one of the three principles that accrual accounting is based on?

Student Answer:

The matching principle

First-in, first-out inventory management

Revenue recognition

Depreciation of long-lived assets

Instructor Explanation:

The answer can be found in Section 2.1: A Review of Accounting.

Points Received:

1 of 1

Comments:

Question 2.

Question :

Time is a factor when determining the value of a possible investment.  As investors, all else being equal, we value investments:

Student Answer:

more the longer we have to wait for the payoff.

less the longer we have to wait for the payoff.

with predefined wait times for payoff.

regardless of time because a dollar is always a dollar.

Instructor Explanation:

The answer can be found in Section 1.1: Valuation.

Points Received:

1 of 1

Comments:

Question 3.

Question :

Opportunity costs can vary over time and:

Student Answer:

are almost always close to 10%.

represent the highest possible return you can earn on an investment.

are always based on the interest rate offered on bank savings accounts.

set a return that other investments must equal or exceed to be attractive.

Instructor Explanation:

The answer can be found in Section 1.1: Valuation.

Points Received:

1 of 1

Comments:

Question 4.

Question :

Western States Transport had net income of $337,000 in 2012. It had depreciation expense during 2012 of $464,000. What is a rough estimate of the company’s cash flow for 2012?

Student Answer:

negative $127,000

negative $27,000

$337,000

$801,000

Instructor Explanation:

The answer can be found in Section 2.4: Translating Accounting Profits Into Cash Flows.