Final Exam | FIN 3154 - Corporate Finance, Quizzes of Corporate Finance

Download Final Exam | FIN 3154 - Corporate Finance and more Quizzes Corporate Finance in PDF only on Docsity! TERM 1 Everything on Income Statement is ________ DEFINITION 1 a flow variablemeasures performance over a specific period of time. TERM 2 revenue-expenses= DEFINITION 2 income TERM 3 cost of debt financing is DEFINITION 3 interest expense TERM 4 net income is the DEFINITION 4 "bottom line" TERM 5 Is net income the same as net cash flow? DEFINITION 5 No!!! This is because the matching principle of GAAP dictates that revenues be matched with expenses. Thus, income is reported when it is earned, even though no cash flow may have occurred TERM 6 Cash inflows DEFINITION 6 source of cash TERM 7 cash outflow DEFINITION 7 use of cash TERM 8 If the transaction precedes the cash flow this is? DEFINITION 8 A credit sale: recognize revenue today, receive cash at a later daterevenue and receivables at recognition datereceivables and cash payment at payment date TERM 9 Cash flow precedes the transaction DEFINITION 9 prepaymentprepaid expense- pay cash today, recognize exp at a later dateprepayment and cash at payment dateprepayment and exp at recognition dateor receive cash today, recognize revenue later TERM 10 non-cash items DEFINITION 10 item recognized by accounting, but no corresponding cash flowdepreciation most apparentanother example: deferred taxes