Unit 1 - Conceptual Framework & Accounting Review Flashcards
True or false: Both Product and Period costs can be fixed or variable.
True.
(Quiz)
What was the intent of the Sarbanes Oxley Act?
It was intended to protect investors from corporate abuses
True or false: In an efficient capital market, security prices fully reflect available information.
True.
Finanicial Institutions act as ________ between investors (with funds) and firms raising funds.
Intermediaries.
(Quiz)
The triple bottom line measures:
Measures a company’s economic, social and environmental performance.
_______ allow corporate ownership to be transferred.
Shares of stock.
What are non-cash items?
Expenses charged against revenues that do not directly affect cash flow. e.g. depreciation.
(Quiz)
RDJ Manufacturing had 300 million shares of stock outstanding at the end of 2015. During 2015, the company reported net income of $600 million, retained earnings of $900 million, and $240 million in dividends paid. What is RDJ’s earnings per share?
$2.00
EPS = Net Income/# of shares
What is CSR?
Corporate Social Responsibility.
In a limited partnership, one or more _______ _______ has unlimited liability runs the business for one more more ______ ______ who do not actively participate in the business.
General Partners have unlimited liability and run the business for one more more Limited Partners.
What is a big advantage of a sole-proprietorship and partnership?
owners keep all the profits.
True or false: Capital Cost Allowance (CCA) is unique to Canada.
True.
Operating cash flow refers to the cash flow resulting from…
day-to-day activities of producing and selling.
(Quiz)
BassiCorporation had a beginning and ending fixed asset balance of $400 and $650 respectively. During the year its net capital spending was $330. Given this information, determine the company’s depreciation expense.
$80
True or false: Long-term debt and Equity are included in a firm’s capital structure?
True
True or false: Workers’ wages are a fixed cost.
False.
What are capital markets?
Financial markets where LONG-term debt and equity securities are bought and sold.
What determines where a firm will get long-term financing to pay for its investments?
The Capital Structure determines the mix of debt and equity maintained by a firm to finance long-term investments.
What is a Primary Market?
A primary market is where the original sale of securities are made (by a corporation of government).
What is a corporation?
A business created as a distinct legal entity by one or more individuals or entities.
The goal of a for-profit business is to…
maximize owners’ equity.
What is an individual’s tax rate if the federal tax rate is 40% and the provincial tax rate is 10%.
50%. Tax rate is the sum of Federal and Provincial tax rates.
What is a third (or tertiary) market?
Third markets trade exchange-listed securities “over the counter” (OTC) and allow investors to trade securities without an exchange.
What is “loss carry-back”?
Using a year’s capital losses to offset capital gains of a previous year.

