Question 1

Which of the following would not be a source of funds?

Accepted Answer

A)  decrease in an equity account 
B)  increase in a liability account 
C)  decrease in an asset account 
D)  cash sales 
A)  decrease in an equity account 
B)  increase in a liability account 
C)  decrease in an asset account 
D)  cash sales A

Question 2

The 2002 Sarbanes-Oxley Act and actions by the stock exchanges:

Accepted Answer

A)  limit the compensation that could be paid to CEOs. 
B)  increase the number of independent directors on corporate Boards. 
C)  provide uniform international accounting standards 
D)  none of the above 
A)  limit the compensation that could be paid to CEOs. 
B)  increase the number of independent directors on corporate Boards. 
C)  provide uniform international accounting standards 
D)  none of the above B

Question 3

Accounting focuses on profitability while finance focuses on cash.

Accepted Answer

A) True 
 B)False  True

Question 4

The success of a business in raising funds for operations depends upon the extent that profits can be produced from operations.

Accepted Answer

A) True 
 B)False

Question 5

One of the important reasons corporations can accumulate large sums of capital is that they are allowed to sell capital stock.

Accepted Answer

A) True 
 B)False

Question 6

The current assets of a business include cash and other assets that are expected to be converted into cash within one quarter.

Accepted Answer

A) True 
 B)False

Question 7

Agency costs are:

Accepted Answer

A)  the costs of hiring managers 
B)  assets minus liabilities 
C)  common stock price times number of shares outstanding 
D)  internal costs associated with managers and directors 
A)  the costs of hiring managers 
B)  assets minus liabilities 
C)  common stock price times number of shares outstanding 
D)  internal costs associated with managers and directors

Question 8

With generally accepted accounting practices, there is one "right way" of accounting for business transactions.

Accepted Answer

A) True 
 B)False

Question 9

The _______________ established the Public Company Accounting Oversight Board (PCAOB).

Accepted Answer

A)  Smoot-Hawley Act 
B)  Sarbanes-Oxley Act 
C)  Gram-Harkins Act 
D)  McKean-Obama Act 
A)  Smoot-Hawley Act 
B)  Sarbanes-Oxley Act 
C)  Gram-Harkins Act 
D)  McKean-Obama Act

Question 10

Worldwide, all corporations use a suffix of either "Inc." or "Corp."

Accepted Answer

A) True 
 B)False

Question 11

Shareholder wealth may be defined as the price of a company's stock times the number of shares outstanding.

Accepted Answer

A) True 
 B)False

Question 12

Liabilities are classified as secured and non-secured.

Accepted Answer

A) True 
 B)False

Question 13

Limited partners cannot participate in the operations of the firm.

Accepted Answer

A) True 
 B)False

Question 14

Inventories are treated as a liability on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 15

Income tax liabilities may differ for each form of business organization selected.

Accepted Answer

A) True 
 B)False

Question 16

The treasurer oversees the traditional functions of financial analysis, including capital budgeting, short-term and long-term financing decisions, and current asset management.

Accepted Answer

A) True 
 B)False

Question 17

All of the following accounts are considered to be current assets on the balance sheet except:

Accepted Answer

A)  cash 
B)  accruals 
C)  accounts receivable 
D)  inventory 
A)  cash 
B)  accruals 
C)  accounts receivable 
D)  inventory

Question 18

On the balance sheet, retained earnings represents

Accepted Answer

A)  net profits for the current year 
B)  net profits for the current year minus preferred stock dividends 
C)  cash reinvested in fixed assets to support growth 
D)  the cumulative total of earnings reinvested in the firm. 
A)  net profits for the current year 
B)  net profits for the current year minus preferred stock dividends 
C)  cash reinvested in fixed assets to support growth 
D)  the cumulative total of earnings reinvested in the firm.

Question 19

Which one of the following alternatives is commonly used to reduce agency problems as they relate to corporate control?

Accepted Answer

A)  stock options 
B)  higher salaries 
C)  larger perquisites ("perks") 
D)  less restrictive accountability requirements 
A)  stock options 
B)  higher salaries 
C)  larger perquisites ("perks") 
D)  less restrictive accountability requirements

Question 20

The most desirable form of business organization from a liquidity standpoint is a corporation.

Accepted Answer

A) True 
 B)False

Which of the following would not be a source of funds?

The 2002 Sarbanes-Oxley Act and actions by the stock exchanges:

Accounting focuses on profitability while finance focuses on cash.

The success of a business in raising funds for operations depends upon the extent that profits can be produced from operations.

One of the important reasons corporations can accumulate large sums of capital is that they are allowed to sell capital stock.

The current assets of a business include cash and other assets that are expected to be converted into cash within one quarter.

Agency costs are:

With generally accepted accounting practices, there is one "right way" of accounting for business transactions.

The _______________ established the Public Company Accounting Oversight Board (PCAOB).

Worldwide, all corporations use a suffix of either "Inc." or "Corp."

Shareholder wealth may be defined as the price of a company's stock times the number of shares outstanding.

Liabilities are classified as secured and non-secured.

Limited partners cannot participate in the operations of the firm.

Inventories are treated as a liability on the balance sheet.

Income tax liabilities may differ for each form of business organization selected.

The treasurer oversees the traditional functions of financial analysis, including capital budgeting, short-term and long-term financing decisions, and current asset management.

All of the following accounts are considered to be current assets on the balance sheet except:

On the balance sheet, retained earnings represents

Which one of the following alternatives is commonly used to reduce agency problems as they relate to corporate control?

The most desirable form of business organization from a liquidity standpoint is a corporation.

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuations

Securities and Markets

Financial Return and Risk Concepts

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters

Exam 13: Business Organization and Financial Data

Which of the following would not be a source of funds?

The 2002 Sarbanes-Oxley Act and actions by the stock exchanges:

Accounting focuses on profitability while finance focuses on cash.

The success of a business in raising funds for operations depends upon the extent that profits can be produced from operations.

One of the important reasons corporations can accumulate large sums of capital is that they are allowed to sell capital stock.

The current assets of a business include cash and other assets that are expected to be converted into cash within one quarter.

Agency costs are:

With generally accepted accounting practices, there is one "right way" of accounting for business transactions.

The _______________ established the Public Company Accounting Oversight Board (PCAOB).

Worldwide, all corporations use a suffix of either "Inc." or "Corp."

Shareholder wealth may be defined as the price of a company's stock times the number of shares outstanding.

Liabilities are classified as secured and non-secured.

Limited partners cannot participate in the operations of the firm.

Inventories are treated as a liability on the balance sheet.

Income tax liabilities may differ for each form of business organization selected.

The treasurer oversees the traditional functions of financial analysis, including capital budgeting, short-term and long-term financing decisions, and current asset management.

All of the following accounts are considered to be current assets on the balance sheet except:

On the balance sheet, retained earnings represents

Which one of the following alternatives is commonly used to reduce agency problems as they relate to corporate control?

The most desirable form of business organization from a liquidity standpoint is a corporation.

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuations

Securities and Markets

Financial Return and Risk Concepts

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters