2 One observable difference between US GAAP and IFRS is

a. US GAPP is scheduled to be retired in five (5) years and all reporting will use IFRS after that

b US GAPP allows for both accrual and cash reporting methods

c US GAPP is required only of US companies and non-profit entities

d US GAPP requires fixed assets be recorded at historical cost whereas FASB can be valued at fair value after initially being recorded at cost

3 A bond with a $10,000 par value has an 4% coupon rate. It will mature in 5 years, and coupon payments are made annually. Using a discount rate of 3.95%, value this bond

a 9,872.15

b 9,981.35 Annual - this is a straight bond

c 10,022.49

d 10,133.74

4 The most recent jobs report (Employment Situation 10/6/2023) reading was reported at (closet answer)

a. none farm payrolls fell 500,000 while the unemployment rate fell to 3.4%. A recession is immanent

b non farm payrolls rose 336,000 while the unemployment rate is at 3.8%

c non-farm payrolls rose 311,000 and unemployment rate fell to 3.6%

d non-farm payrolls rose 311,000 and unemployment rate edged up to 3.6%

6 All of the following are considered operating line items on the income statement except

a. impairments of operating assets such as goodwill

b. gains and losses on disposals of operating assets such as PPE and strategic investments

c. costs of goods sold (COGS)

d interest and dividend income on non-strategic investments

7 In order to realize the gain on the sale of an asset (best answer)

a. the asset's price must never fall below its initial purchase price

b. the asset's price must be greater than its cost, or positive

c. the asset must be held for at least one year after it is purchased

d. the asset must be sold or liquidated

8 If the price/value of an asset such as a bond includes accrued interest, we are most likely describing

a. a clean price

b a dirty price

c. book value

d an asset identified as "available for sale"

9 Stocks with low P/E (Price/Earnings) Ratios would best describe

a growth stocks

b value stocks

c stocks with low dividend yields

d none of the above

10 After the most recent Federal Reserve Bank Open Market Committee meeting (day of announcement)

a The FOMC decided to raise the Federal Funds Rate and signal further aggressive rate hikes

b The FOMC decided to leave the Federal Funds Rate unchanged

c The FOMC decided to lower the Federal Funds Rate

d The FOMC released the Employment Situation report, and the markets were shocked

11 With this type of accounting and financial reporting system, revenues are recorded when earned and realized, and expenses are matched to those revenues

a. the American basis

b. the international basis

c. cash basis

d accrual basis

A firm has net sales of $8,500,000, Cost of Goods Sold $4,850,000, Depreciation Expense of $300,000, Selling and Administrative Expenses of $750,000, Interest Expense of $500,000, and an average tax rate of 20%. 12 The firm's Net Income is

a. 402,350

b. 502,000

c. 904,000

d 1,680,000

13 The firm's Operating Margin is

a. 30.6%

b. 21.7%

c. 19.0%

d 17.3%

14 The firm's Gross Profit Margin is

a. 53.7%

b. 42.9%

c. 35.3%

d 30.1%