Q1:Which accounting assumption details that a company will continue to exist long enough or for an indefinite period to meet its objectives and commitments and will not liquidate for the foreseeable future?

  https://1drv.ms/b/s!AjrXg04FIatBgWam8bSWwda694kB?e=IyQvhH

 

1. Time period
2. Going concern
3. Economic entity
4. Accrual basis of accounting

Q2: Which accounting principal details that assets and liabilities are recorded at cost at which they were acquired and generally not restated for changes in value?

1. Matching principal
2. Full disclosure
3. Historical cost
4. Revenue recognition

Q3:Where would we take the basic and not fully diluted number of shares outstanding for The Proctor and Gamble Company from?

1. Income statement
2. Balance sheet and notes to the financial statements
3. Generally, at the last page of the most recent 10-K. We will also look at press releases to see if the company has not done a share offering, stock split or a major share repurchase during the time between filing two 10-Qs or a 10-K and a 10-Q.
4. Generally, at the front page of the most recent 10-K or 10-Q. We will also look at press releases to see if the company has not done a share offering, stock split or a major share repurchase during the time between filing two 10-Qs or a 10-K and a 10-Q.

Q4:Management Discussion and Analysis section (MD&A) will generally not talk about

1. Material changes in line items of the consolidated financial statements from prior-period amounts. Discussion usually covers the recent three fiscal years with year-to-year comparisons, i.e., 20Y2 vs. 20Y1 and 20Y1 vs. 20Y0
2. Non-recurring charges or gain that are one time in nature
3. Bios of the management team of the company
4. Allows the company management to tell its story in its own words

Q5:Does P&G give guidance for fiscal year 2024?Please look at the P&G first quarter ended September 30, 2023, press release to answer the question. (https://www.pginvestor.com/financial-reporting/press-releases/news-details/2023/PG-Announces-Fiscal-Year-2024-First-Quarter-Results/default.aspx)

1. P&G gives guidance for fiscal year ending 2024 and mentions sales growth in the range of nine to ten percent versus the prior year, organic sales growth in the range of eight to nine percent, diluted EPS in the range of two to three percent versus fiscal 2023 EPS of $12.90, effective tax rate of 18% in fiscal 2024, capital spending is estimated to be approximately 4% of fiscal 2024 net sales and expects to pay more than $12 billion in dividends and to repurchase $1 billion to $2 billion of common shares in fiscal 2024
2. P&G gives guidance for fiscal year ending 2024 and mentions sales growth in the range of two to four percent versus the prior year, organic sales growth in the range of four to five percent, diluted EPS in the range of six to nine percent versus fiscal 2023 EPS of $5.90, effective tax rate of 21% in fiscal 2024, capital spending is estimated to be approximately 4.5% of fiscal 2024 net sales and expects to pay more than $9 billion in dividends and to repurchase $5 billion to $6 billion of common shares in fiscal 2024
3. P&G does not give guidance for year ended June 30^th, 2024 or Fiscal Year 2024
4. No company gives you guidance in the U.S. including P&G

Q6:Second quarter of the 10-Q will generally give income statement numbers forwhich period(s)?

1. Six months of the fiscal year only
2. Second quarter three-month numbers only
3. Second quarter three-month income statement as well as first six months of the fiscal year numbers as well as second quarter three-months income statement of the prior year and first six months income statement of the prior year
4. Three months income statement for first quarter and three months' income statement for second quarter

Q7:A company buys a machine for $100,000 and the machine has a useful life of five years and

the residual value of the machine at the end of the five years is $40,000. What would be the

depreciation expense if the company uses straight line depreciation method?

1.  

Q8:A company's operating income orEBIT is $20,000, depreciation and amortization which was included in selling, general and administrative expenses are $6,000 and interest expense is $2,000. The tax rate is 20%. What would be the EBITDA of the company?

1.  

Q9:Company Ahas a net income of $20,000and has a tax rate of 50%. Its interest expense is $8,000 and interest income is $4,000. The company has depreciation and amortization which is included in COGS and SG&A of $4,000. Please calculate EBITDA of Company A.

1.  

Q10:For a public company, should the actual amount of depreciation and amortization expense (please note we are talking about the dollar amount of D&A and not the line item called depreciation and amortization on the income statement)

1. Always be included in the income statement
2. Sometimes be included in the income statement
3. Never be part of the income statement since it is shown separately in the cash flow statement
4. Depreciation is shown in balance sheet and not in the income statement

Q11:A company issued shares in the market at $12.00 and recorded $0.10 par value and $11.90 as additional paid in capital on December 31, 2020 in its balance sheet. On December 31, 2021, the market value of the shares went up to $15.00. How will the par value and additional paid in capital change?

1. No change to par value and additional paid in capital will be up by $3.00
2. No change to both par value and additional capital
3. Par value and additional capital will go up by same proportion so par value will go up to $.125 and additional paid in capital will go up to $14.875
4. Both will reduce by the amount proportionately to the increase in market value

Q12:If the company pays cash before it recognizes the expense, it is called what on the balance sheet?

1. Unearned revenue liability
2. Accounts payable
3. Accounts receivable
4. Prepaid expense

Q13: Retained earnings is the

1. Company's net income and losses from the date of incorporation to the current balance sheet date minus the cumulative amount of dividends declared
2. Net income of the current year
3. Net income of the year plus dividends
4. Company's net income and losses from the date of incorporation to the current balance sheet date plus the cumulative amount of dividends

Q14:A company has a $10,000,000 loan from a bank which is payable in 10 years and has a payment of $1,000,000 out of the $10,000,000 million total due payable in six months from the date of the balance sheet. How will the debt be shown on the balance sheet?

1. $1,000,000 as current portion of long-term debt in current liabilities and $9,000,000 as long-term debt in the balance sheet under long-term liabilities
2. $10,000,000 as long-term debt in balance sheet under long-term liabilities
3. $1,000,000 as current portion of long-term debt in current liabilities and $10,000,000 as long-term debt in the balance sheet under long-term liabilities
4. Not shown on balance sheet

Q15: Shareholders' equity comprises of amounts invested by shareholders in a company as well as the amounts earned by the company on behalf of the shareholders. It comprises of

1. Par value and additional paid-in capital
2. retained earnings
3. treasury stock and accumulated other comprehensive income
4. all of the above

Q16:If the company had $1,000 of gross assets and the accumulated depreciation was $400, it would be shown in balance sheet as

1. Gross PP&E of $1,000 Less: Accumulated Depreciation of $400 and Net PP&E of $600
2. Gross PP&E of $1,000 Add: Accumulated Depreciation of $400 and Net PP&E of $1,400
3. Gross PP&E of $1,000 since Accumulated Depreciation and net PP&E are not shown on balance sheet
4. Accumulated Depreciation of $600

Q17: Earnings before tax (EBT) is also called pre-tax incomeand is calculated by

1. EBIT plus interest expense minus interest income
2. is the same as EBITDA
3. subtracting all expenses including COGS, SG&A and interest expense (net) from revenues.