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1. Use Whole Pine Inc.'s financial statements for 20X3 below to answer the following question.
What is Whole Pine Inc.'s quick ratio for 20X3?

A) 4.00
B) 0.15
C) 0.65
D) 2.50
2. Why might tax expense on the income statement not reflect the actual taxes paid by a firm?
A) Because tax expenses are always deferred to the next fiscal year
B) Because tax expense is never an estimation and not based on real figures
C) Because all tax expenses on the income statement accurately reflect taxes paid
D) Because there are differences between tax and accrual accounting rules
3. A company is looking to invest in new machinery that will enhance overall efficiency. The projected assets needed for the project are $590,000, the projected liabilities are $431,000, and the projected equity is $49,000.
What is the discretionary financing need (DFN)?
A) $10,000
B) $382,000
C) $159,000
D) $110,000
4. Which requirement does the Sarbanes-Oxley Act (SOX) impose on company executives?
A) Assume responsibility for the company's debts
B) Certify the accuracy of financial information
C) Divest all personal company shares
D) Hold an accounting certification
5. A start-up company ' s lender is concerned that the company may not be able to meet its financial obligations.
It asks the company to provide it with information regarding its current assets and current liabilities.
Which information would the start-up company need to provide to the lender?
A) Obligations that require cash within the next year
B) Long-term debt obligations payable to the bank
C) Depreciation of equipment the firm uses for its daily operations
D) Investments that the firm plans to hold for more than one year
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: D | Question # 3 Answer: D | Question # 4 Answer: B | Question # 5 Answer: A |
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