Financial Management - Study Mode

[#321] Securities with less predictable prices and have longer maturity time is considered as
Correct Answer

(D) short-term investments

Explanation

Solution: Securities with less predictable prices and have longer maturity time is considered as short-term investments. Short-term investments are designed to provide considerable returns in a short period of time, which could be a few months or even a year.

[#322] Number of shares outstanding if it is divided by net income for using to calculate
Correct Answer

(A) earning per share

Explanation

Solution: Number of shares outstanding if it is divided by net income for using to calculate earning per share. Earnings per share or EPS is an important financial measure, which indicates the profitability of a company. It is calculated by dividing the company's net income with its total number of outstanding shares.

[#323] Purchase cost of assets over its useful life is classified as
Correct Answer

(B) depreciation

Explanation

Solution: Purchase cost of assets over its useful life is classified as depreciation. Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life and is used to account for declines in value. Businesses depreciate long-term assets for both tax and accounting purposes.

[#324] Process of calculating future value of money from present value is classified as
Correct Answer

(A) compounding

Explanation

Solution: Process of calculating future value of money from present value is classified as compounding. Compounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time.

[#325] Type of basic financial statements consist of
Correct Answer

(D) all of above

Explanation

Solution: Type of basic financial statements consist of balance sheet and income statement, statement of retained earning and statement of cash flows.