20 2007 2006 Sales 46,574 42,340 Cost of sales 14,000 13,000 SG A 13,720 12,200

Question

20
2007 2006







Sales

46,574
42,340







Cost of sales
14,000
13,000







SG A

13,720
12,200







operating income
18,854
17,140







income taxes
6,410
5,565





















Net income
12,444
11,484














Compared to core operating margin in   2006, Sebastiani's core operating margin in 2007 was:




A. Lower












B. higher












C. unchanged
























21 A warning sign that ordinary   expenses are now being classified as nonrecuring or nonoperating expenses


A. falling core operating margin   followed by a spike in positive special items





B. a spike in positive special items   followed by falling core operating margin





C. falling core operating margin   followed by a spike in negative special items
































22 Which of the following obligations   must be reported on a company's balance sheet ?




A. Capital leases











B. operating leases











C. purchase commitments























23 the most accurate estimate for off   balance sheet financing related to operating leases consists of the sum of:


A. Future payments











B. Future payments less a discount   to reflect the interest component






C. Future payments plus a premium to   reflect  the interest component



















24 The intangible asset goodwill   represents the value of an acquired company that cannot be attached to other   tangible assets.
This noncurrent asset account is   charged to an expense:







A. As amortization











B. When it becomes impaired










C. At the time of the   acquisition






















25 Total accruals measured using the   balance sheet is most likely to differ from tota; accdrualsmeasured using the   statement of cash
flows when the company has made   acquisitions








A. Financed by debt











B. in an exchange for cash










C. in an exchange for  stock

Explanation / Answer

A. Lower

C. falling core operating margin followed by a spike in negative special items

A. Capital leases(In contrast, a capital lease is more like a loan; the asset is treated as being owned by the lessee so it stays on the balance sheet)

C. Future payments plus a premium to reflect the interest component

B. When it becomes impaired

A. Financed by debt

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