Question1: Which of the following items is NOT included in current assets?
[A] Accounts receivable
[B] Cash
[C] Short-term, highly liquid, marketable securities
[D] Accounts payable
[E] Inventory
Question2: Which of the following statements is CORRECT?
[A] Borrowing using short-term notes payable and using the proceeds to retire long-term debt is an example of ‘window dressing. ‘Offering discounts to customers who pay with cash rather than buy on credit and then using the funds that come in quicker to purchase additional inventories is an example of ‘window dressing.'
[B] Offering discounts to customers who pay with cash rather than buy on credit and then using the funds that come in quicker to purchase additional inventories is an example of ‘window dressing.'
[C] Borrowing on a long-term basis and using the proceeds to retire short-term debt could be an example of window dressing.
[D] ‘Window dressing is any action that improves a firm's fundamental long-run position and thus increases its intrinsic value.
[E] Using some of the firm's cash to reduce long-term debt is an example of ‘window dressing.'
Question3: Which of the following is a primary market transaction?
[A] IBM issues 2,000,000 shares of new stock and sells them to the public.
[B] One financial institution buys 200,000 shares of IBM stock from another institution. An investment banker arranges the transaction.
[C] IBM sells 2,000,000 to its employees when they exercise options granted in prior years.
[D] You sell 200 shares of IBM stock on the NYSE through your broker.
[E] You buy 200 shares of IBM stock from your brother. The trade is not made through a broker-you just give him cash and he gives you the stock.