Choose the right answer:
1. A statement that reports the financial position (assets, liabilities, and stockholders' equity) of an accounting entity at a point in time is called a(an):
Income statement
Statement of retained earnings
Balance sheet
Statement of cash flows
Report of management
2. Two major methods of asset valuation are:
historical cost and future cost
historical cost and acquisition cost
historical cost and replacement cost
acquisition cost and future cost
3. _____ is the most important financial metric to review to determine long-term financial viability.
Return on equity
Total margin
Days cash on hand
Hospital cost index
None of the above
4. What is/(are) the primary determinant(s) of firm value?
Profit
Investment
Cost of capital
All of above
5. What are the major reasons for accrual accounting?
6. What is an accounting entity?
7. The HC method, which uses unadjusted historical costs, does not take into account depreciation expenses, purchasing power, and unrealized gains in replacement value. Despite these weaknesses as a financial reporting method, the HC method is used more frequently for accounting purposes than other methods, such as the HC-GPL, CV, and CV-GPL methods. Why is this so?
8. What is the basic accounting equation?