Question 1 -- / 10 Choose the most appropriate answer. Liabilities are Owed by a firm 2 Owned by a firm 3 Irrelevant for a firm 4 Buildings and machinery Question 2 -- / 10 Debt is owner's money. 2 Need not be repaid. Remains with the firm forever. 3 has to be repaid to the lenders with interest. 4 means only interest is owed to the lenders Question 3 -- / 10 Which of the following has an infinite life? Both debt and equity 2 Neither of the two 3 Equity 4 Debt Question 4 -- / 1 Recall the balance sheet equation. If ABC Inc has assets worth $1.75 million and has financed $0.75 million of its assets by borrowing debts (liabilities), what amount of the assets is financed through owner's equity? $0.75 2 $1.75 million 3 $1.0 million $1.2 million Question 5 -- / 10 What is capital structure? 1 Structure of the capitol building 2 Combination of debt and equity to finance the overall operations and growth of a firm. 3 Money market 4 Assets and liabilities Question 6 -- / 10 Which of the following has a finite life? Equity 2 Neither debt nor equity 3 Debt 4 Both debt and equity Question 7 -- / 10 The Balance Sheet Identity is: 1 The Sum of all assets minus the liabilities 2 The value of the Owners Equity 3 The same as the Net Working Capital 4 Assets = Liabilities + Owners Equity = Question 8 -- / 10 Assets are financed by 1 Debt alone 2 Debt and Equity 3 None of the above 4 Equity alone Question 9 -- / 1 Which financial statement reports a firm's assets, liabilities, and equity at a particular point in time? Balance sheet 2 Income statement 3 Statement of retained earnings 4 Statement of cash flows Question 10 -- / 10 Which of the following is not equity? Retained earnings 2 Common stock 3 Preference stock 4 Assets Question 10 -- / 10 Which of the following is not equity? Retained earnings 2 Common stock 3 Preference stock 4 Assets Question 11 -- / 10 Assets are Owed by a firm 2 Owned by a firm 3 Goods and services produced by a firm. 4. Made by a firm